Year 2009-2010 - Sunny Path of Tomorrow’s Insurance Intermediaries

Feature 專 題 探 討 When I was asked by the Founding President of HKCII to write an article on “Sunny Path of Tomorrow’s Insurance Intermediaries”, I had to give him a positive response as he twisted my arm and I was particularly intrigued by the subject. Indeed, Hong Kong experienced different climates in the insurance trade in the past decades. Interestingly, General and Life insurance fields had different weathers for the same period of time. The seventies Transaction of General insurance was governed by the Tariff, called the Red Book, compiled and published by the respective Insurance Associations. The premium rates, conditions of cover and warranties to be applied, etc. were specified in the Book. Every member company had to comply, otherwise she would be warned and liable to dismissal from the Associations. Those days, all reputable insurers were members. The market was orderly and competition not fierce. The sky was blue in the General insurance arena. Life insurance was a different ball game. In the seventies, people in Hong Kong were superstitious of buying or even talking of life insurance. When they caught sight of a friend selling Life insurance, they would detour. The weather was rather cloudy. But every cloud has its silver lining. My fond memories included that in the mid-seventies, I was lucky to close a few cases, the commission so derived was good enough to pay 30% deposit for buying a new flat. Mind you, a property of 1,000 sq. ft. in urban area only cost HK$200,000 back then. The eighties Clouds were all over the General insurance sky. One or two power houses took the lead to breach the Tariff. Cut-throat rates were quoted. Competition became fierce. Clients bargained with you for every dollar of the premium. Even if you could bring home the business, the commission was substantially reduced. The days were gloomy for the General insurance intermediaries. Over the Life insurance camps, the sun shone. As Hong Kong moved to a middle-class cosmopolitan city, Life insurance was considered a necessary product for family financial planning. The market became buoyant. Life insurance agents were able to make a good living. The nineties The General insurance market became more mature. The Tariff was totally gone while competition remained keen. Fortunately, Hong Kong was enjoying an economic boom. Everyone seemed to be Yearbook 2009 年刊 & Prospect 2010 展望 11