Hong Kong is currently seeing a flood of professionals from mainland China’s finance and technology sectors, disillusioned with their career and salary prospects across the border. Many are trying to make a living and stay in the city by selling insurance products, giving a new lease of life to a once-sluggish industry.
Insurers and agents of AIA Group Ltd., Prudential Plc and other financial firms in Hong Kong are recruiting more Chinese citizens to sell insurance policies to mainland visitors, a business that has historically been under regulatory oversight but is booming again after slumping during the coronavirus pandemic.
Chinese tourists have invested a total of more than HK$75 billion (US$9.6 billion) in insurance policies in Hong Kong since the beginning of 2023 after authorities lifted the strict border controls that were in place for most of the pandemic, despite a recent crackdown by city regulators on corrupt practices and the unlicensed sale of the products.
Most of the policies taken out by tourists are denominated in US dollars or Hong Kong’s currency – which is pegged to the greenback – and have allowed Chinese citizens to transfer money abroad and invest it there for the long term. The products offer critical illness cover or term life insurance and often include savings or investment-like features that increase their value over time. Buyers see this as a way to protect their wealth from the weakening yuan and benefit from the Asian financial centre’s higher interest rates.
It’s also a windfall for insurance agents, who earn high commissions when they sell the policies to Chinese tourists. Top earners can earn more than HK$10 million a year – well over US$1 million – plus bonuses, say several agents who know of such cases or have seen their company’s internal ranking of top earners and wish to remain anonymous.
Insurers in Hong Kong are not allowed to sell their products on the mainland, so many agents rely on networks of family, friends and personal contacts to persuade Chinese citizens to travel to the Asian financial capital to sign papers and purchase policies. Once there, customers either open bank accounts in Hong Kong and transfer money abroad, or use their Visa or Mastercard credit cards to purchase insurance policies. China allows individuals to transfer up to $50,000 a year out of the mainland.
Talent visa
Hong Kong relaxed its work visa criteria in late 2022 after a wave of emigration threatened to undermine the city’s status as an international financial centre. It launched a Top Talent Pass Scheme, which grants two-year visas to jobseekers from top universities and other skilled individuals, and eliminated quota limits on its Quality Migrant Admission Scheme, another scheme that does not require applicants to have a job lined up in advance.
About 200,000 people have since been granted Hong Kong work visas, and the vast majority of Talent Pass holders are from mainland China.
At a recent AIA weekly “morning briefing” for insurance agents and others interested in becoming insurance agents, a group of about 40 people discussed sales strategies in Mandarin. Many had recently obtained visas through the talent program and were between the ages of 20 and 50. The speaker also discussed the benefits of a Hong Kong passport, which can be obtained after seven years of residence in the semi-autonomous Chinese territory. The AIA did not respond to requests for comment.
On a sweaty July afternoon, dozens of Chinese waited outside a classroom in the tower of the Vocational Training Council in Wanchai to take the exams required to become insurance agents, many poring over study materials bearing the AIA or Prudential logo.
Xiaohui Li, a part-time insurance agent who got her Hong Kong work visa in late 2023, was there accompanied by two friends. Li said she has worked at a Chinese internet company in Shenzhen for more than a decade and currently earns more than 1 million yuan ($139,600) a year, but she intends to quit her job to work full-time at Prudential.
She said it was a good time to move from the declining technology sector to the booming insurance market. “It’s hard to say how many years after you reach middle age you can still earn the same lavish salary at these technology companies,” said Li, who is in her late 30s. She believes older workers are more likely to be laid off.
Shen, a Hong Kong work visa holder who asked that her first name not be used, flew in from Beijing to take the exam. She said she is keeping her job in mainland China for now but plans to work part-time as an insurance agent in Hong Kong and earn enough money to be able to extend her visa in the future. That could be a way for her children to come to Hong Kong to attend school later, she said.
Salary is important
People who came to Hong Kong under the Top Talent Pass Scheme can apply for an extension of their visa if they have a job with a “market-level” compensation package, according to the city’s immigration department. The average base annual salary for insurance agents in Hong Kong is HK$473,564 per year and their average bonus is HK$66,256, according to data from the ERI Economic Research Institute.
Not everyone was a surefire bet. Sun, a woman with a PhD who asked to be identified only by her last name, said she got a work visa for Hong Kong last year after spending several years teaching at international schools in southern China. Soon after, the agent who helped her with the visa application invited her to work at Prudential. He said the income Sun could earn as an insurance agent could help her extend her visa – and eventually get permanent residency in Hong Kong.
Sun said she was told she could receive a HK$60,000 welcome bonus from the insurer if she completed a series of online and in-person training courses and sold policies with premiums worth at least HK$90,000 within six months.
She said she took out a savings and life insurance policy for herself with an annual premium of $19,300 – which covered the minimum turnover – and received a commission of HK$45,000 ($5,776) in the first year. But she did not receive the bonus because she was late for one of the online training sessions, after which Prudential terminated its contract with her, according to documents seen by Bloomberg News.
Sun said this also means she will no longer receive commissions on the policy she took out. She has filed a complaint against Prudential with Hong Kong’s insurance regulator, which informed her that it had forwarded the complaint to the company, according to emails seen by Bloomberg.
A Prudential spokesperson said the company does not comment on individual cases, but said it is important that its financial advisers complete the necessary training to meet legal requirements and maintain professional standards when serving its clients.
Hong Kong regulators have noticed that some insurance agents are buying policies for themselves and declaring the commissions as income. When reviewing visa extension applications, immigration authorities have asked insurance agents to provide monthly commission statements and to declare how many insurance policies they have sold for people other than themselves, according to some agents.
Hong Kong’s Minister for Labour and Welfare, Chris Sun, said at the end of June that the immigration authorities would rigorously review applications from insurance agents for extensions of residency.
Newer participants
Regulatory scrutiny aside, more and more companies and agents expect that the business of selling insurance products to mainland visitors will continue to flourish.
HSBC Life, the insurance arm of HSBC Holdings Plc, has also increased sales of policies to Chinese tourists through the bank’s branches and other platforms. Chow Tai Fook Life Insurance Co., which recently changed its name from FTLife, said half of the policies sold last year went to mainland Chinese and sales exceeded pre-pandemic levels.
“We believe that Hong Kong’s insurance offerings will continue to attract customers from mainland China in the long term,” said Man Kit Ip, CEO of CTF Life, adding that his company aims to increase its agent base by 50% to about 3,000 in the fiscal year beginning July 1, 2024.
Daniel Niu worked for a state-backed securities broker in Shenzhen for 17 years before quitting his job as a sales manager with an annual salary of 800,000 yuan and moving to Hong Kong this year. The 39-year-old is working as an insurance agent while completing a master’s degree that will eventually enable him to obtain a two-year work visa for overseas graduates.
Niu said he eventually wants to live in Hong Kong permanently and thinks the city is a better place to raise his 8-year-old child. He estimates he needs to earn at least HK$70,000 a month to cover living expenses, which include rent, school fees and food. He had the opportunity to start at his previous employer’s Hong Kong office, but said it offered limited salary and advancement opportunities.
As an insurance agent, he has no income limit, Niu said. “I just hope I have enough money,” he said.
