Denizens of Shenzhen, a city neighboring Hong Kong, were the first among the mainlanders to spark an insurance bonanza in the special administrative region. But gradually, they found new business opportunities in promoting Hong Kong insurance products to fellow mainlanders.
Lyu Wei from Shenzhen works in the financial services industry. In the second half of 2014, he took up a part-time job of introducing Hong Kong insurance products to mainland buyers. Now, he leads a team of 20 people and serves more than 200 clients from Guangdong, Sichuan, Shanghai and even Beijing.
Since mainland agents and brokers need authorization of Hong Kong companies to sell the latter's insurance products, Lyu has teamed up with a Hong Kong insurance broking company. He is also constantly expanding his network of contacts in the mainland so he could find more buyers on Hong Kong's insurance products.
He said his firm only introduces clients to insurers and provides consultation services. Policy buyers among his clients sign insurance contracts through Hong Kong partners.
His team also recommends customized packages of insurance products to clients.
"Hong Kong's insurance products are very diversified," he said. "We can compare products of different companies and recommend a package that suits a client."
Once buyers select a product, he arranges for paperwork through his broker partner in Hong Kong. He or his team members accompany buyers to complete the whole process.
Sometimes, they also help make arrangements for travel, food and accommodation in both Shenzhen and Hong Kong. Time permitting, clients are even offered a tour of Hong Kong. In addition, after-sales services include help in claim settlements and policy renewals.
All these services are free of cost, and are said to be bankrolled by commissions from insurers that also support agent-driven broker firms.
In addition to individual services, some firms in Shenzhen have websites that compare different Hong Kong insurance products. Sites such as Gxianb.com specialize in offering online consultation services.
The rush for Hong Kong insurance has spawned some illegal mainland firms that accept unauthorized business from Hong Kong brokers. Some of them even give false assurances to prospective customers that insurance contracts could be signed on the mainland itself without having to travel to Hong Kong.
Regulations stipulate that policy buyers need to be physically present in Hong Kong at the time of signing the insurance contract.
Samuel Yung, honorary president of the Association of Registered Financial Consultants of Hong Kong and Macao, said hopes of high profits have driven some third-party asset management companies into illegitimate insurance-related business.
This leads to many problems, and could destroy the development of Hong Kong's insurance industry. Mainland regulators should intensify action against such illegal services, he said.
