In Hong Kong: In the Hong Kong Business Insurance Rankings, life insurers lead.

The "Hong Kong Business Insurance Rankings" reveal a trend toward more life insurers joining the list of the top 50 insurers, indicating a significant shift in Hong Kong's insurance industry.

In comparison to 20 general insurers, 30 life insurers made the top 50 list. This is different from the previous rankings, where there were equal numbers of general and life insurers on the top 50 list.

The opportunity in the insurance market on mainland China is to blame for this shift.

According to several analysts interviewed by Hong Kong Business, an English-language business magazine, if 2021 saw an increase in health-focused trends, 2022 saw insurers shift their focus toward digitalization, environmental, social, and governance (ESG), and workforce trends.

Here are some of the trends:

Work arrangements There has been a move toward flexible or remote work. According to Ms. Joanna Wong, HK Insurance Leader at Deloitte China, "Insurers have adapted by adopting virtual customer and distributor engagement, transitioning to a remote workforce, and capitalizing on a more agile digital infrastructure to meet evolving expectations for customised products, channels, and services."

Digital insurance Products that offer simplified, on-demand insurance have gained popularity. As long as insurance isn't too complicated, customers are becoming more and more willing to purchase it.

Consumers and insurers alike continue to face difficulties as a result of inflation. According to Mr. Billy Wong, insurance leader at PwC Hong Kong, this means raising rates for life and retirement insurers, which can reduce reinvestment risk and make rate guarantees more economically cost-effective.

However, a disintermediation risk could arise from an excessive rate increase, which would have a negative impact on balance sheets. In order to reduce this risk, insurers may need to frequently adjust pricing and rate guarantees in response to market demand for book value guarantees.

Mr. Wong admonished, "Higher interest rates may also make certain product types less appealing to consumers." Consumers are already being affected by inflation even if insurance premiums do not rise. 16% of people in Hong Kong said they would cut back on insurance costs.

Certain product types may also become less appealing as a result of fluctuating equity markets and higher interest rates. Mr. Wong suggested that insurers think about rebalancing their portfolios, possibly returning to more conventional investments and using fewer alternative asset classes.

He added, "This also applies to general insurers." Insurers' primary focus when it comes to pricing is to incorporate longer-term market trends into the typically shorter-term nature of their products.

Innovation Mr. Leslie Foo, Deloitte China's insurance director, added that these trends have pushed insurers to be flexible and resilient as they reinvent the insurance industry over the past few years and overcome pandemic-related challenges.

He stated, "The emerging trends have pushed insurers to maintain an ongoing culture of innovation while the industry continues to make customer-centricity a focal point of the industry's standard operating model." To fully realize the value and benefits of infrastructure and technological upgrades, insurers should pivot from having laid the foundation for operational transformation, such as moving to the cloud."

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