The Closer Economic Partnership Arrangement (CEPA) with the mainland will enable local insurance firms to invest up to 24.9 percent in mainland companies, providing significant opportunities for Hong Kong insurers to tap the potentially huge mainland market, said the Office of the Commissioner of Insurance (OCI).
Commissioner of Insurance Benjamin Tang said he anticipates more local insurance intermediaries to practice in the mainland, as the implementation of CEPA will allow local insurance agents to work for mainland insurance firms, contributing to more employment opportunities.
The general insurance business in Hong Kong recorded steady growth in the first half of the year, with a 3.6 per cent growth in net premiums amounting to HK$8.6 billion (US$1.1 billion), he said.
The long-term insurance industry also reported strong growth in the first six months of 2003, with an increase of 16.1 percent in new office premiums that amounted to HK$10.03 billion (US$1.3 billion).
"The local insurance sector has rebounded considerably from the impact of SARS, and the epidemic has given way to a new awareness of the necessity of risk management and the investment potential of insurance products," said Tang.
The general insurance industry grew by 20.6 percent last year in a turnaround trend since 2000, while gross premiums increased to HK$23.448 billion (US$3 billion) from HK$19.436 billion (US$2.49 billion) in 2001, said the OCI in a statement yesterday.
According to Tang, gross premiums including both general and long-term insurance businesses reached HK$89 billion (US$11.4 billion) in 2002 despite a stagnant local economy, up 16.6 percent from 2001; while total gross premium revenue was the equivalent of about 7.1 percent of Hong Kong's gross domestic product last year.
(China Daily October 23,2003)