Speaking live on stage at Insurtech Insights Asia 2024 during a discussion with Hung Wai Wong, President of Asia’s conference, Moncrieffe pointed out that Hong Kong has “the third worst demographics in the world,” suggesting a market primed for stagnation. Basic economic principles would predict slow growth due to a shrinking population.
However, reality paints a different picture. Statistics from the Hong Kong Insurance Authority reveal a surprising 12% growth in new policy premiums. This seemingly impossible feat can be attributed to Hong Kong’s strategic role as a bridge between mainland China and the international community.
Gateway to Growth: Leveraging a Unique Position
Moncreiffe said that Hong Kong’s function as a “super connector” between China and the rest of the world. This unique position allows Hong Kong to serve a vast international customer base, exceeding mere geographical proximity to China.
He further highlighted the impressive fact that insurance policies have been issued to customers from a staggering 48 different nationalities this year. This underlines Hong Kong’s status as a true international financial center, catering to a diverse global clientele.
The importance of maintaining an international focus was stressed. While mainland China presents a significant opportunity, neglecting the “other end of the bridge” could hinder long-term growth. Hong Kong must effectively function as a gateway in and a gateway out, attracting international business while serving as a launchpad for Chinese companies seeking global expansion.
“We saw the damage, the challenges, that Hong Kong faced during Covid, when one end [of the bridge] was closed. So my advice if (I may be so bold) to the Hong Kong government is to focus on both ends of the bridge. It’s very easy to get distracted and focused on the mainland China population and the needs of that business. But you have to look at both ends of the bridge. It’s a gateway in and a gateway out,” Moncreiffe said.
Beyond Geography: The Pillars of Hong Kong’s Success
https://www.insurtechinsights.com/europe/During the session, he also identified three key factors that have historically contributed to Hong Kong’s success as an international financial centre
- Geography: Hong Kong’s deep-water port and proximity to mainland China have made it a vital trade hub for centuries.
- Law: A robust legal system based on common law principles ensures contract certainty and fosters trust among international businesses.
- English Language: As the language of international finance, English fluency has historically been a significant advantage for Hong Kong.
Challenges and Opportunities
There are potential threats to Hong Kong’s dominance. Globalisation and advancements in digitalization could diminish the geographical advantage. Additionally, a potential decline in English proficiency among younger generations poses a future risk.
To maintain its competitive edge, Hong Kong must focus on:
- Infrastructure Development: Investing in both physical and digital infrastructure to streamline business operations and maintain its position as a frictionless trade hub.
- Regulatory Strength: Continued focus on robust prudential and conduct regulations to ensure market stability and consumer protection.
- Language Skills Development: Investing in initiatives to ensure future generations maintain strong English language skills, a crucial asset in the international financial landscape.
Moncrieffe concluded that by effectively addressing these challenges and capitalizing on its unique position, Hong Kong can ensure its continued success as a thriving international insurance hub, defying demographic limitations through its role as a global gateway.
