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Creditor Insurance in Hong Kong

  • March 2015
  • -
  • Finaccord
  • -
  • 21 pages

Finaccord’s report titled Creditor Insurance in Hong Kong offers uniquely detailed insights into the market for creditor insurance, sometimes also referred to as payment protection insurance or loan-related insurance, as acquired by individual borrowers in Hong Kong. Drawing on the results of a survey of 34 lending institutions, the study analyses the distribution of creditor insurance by banks and other lending institutions, how provision rates vary for different lending products, operating models used for arranging creditor insurance, and distribution partnerships weighted by the size of distributors. The PartnerBASE™ dataset that accompanies the report details all creditor insurance distribution deals traced by Finaccord. In short, this study will provide you with the definitive guide to current and future opportunities in creditor insurance in Hong Kong.

Table Of Contents

Creditor Insurance in Hong Kong
0.0 EXECUTIVE SUMMARY 1
1.0 INTRODUCTION 3
What is this report about? 3
This report provides a comprehensive analysis of loan-related insurance policies in Hong Kong 3
Rationale 3
The report tracks initiatives for marketing creditor insurance through over 30 lending institutions 3
Methodology 3
Survey of banks and other lending institutions 3
Market data 4
Definitions 4
Creditor insurance 5
Mortgages, consumer finance and credit cards 5
Weighted provider share of partnerships 5
Operating models 6
Abbreviations and exchange rates 6
PartnerBASE and market data annexe 7
Finaccord 7
2.0 MARKET ANALYSIS 9
Banks and other lending institutions covered 9
Introduction to the banking sector 9
Hong Kong's banking sector was liberalised in the early years of the 21st century 9
While the Bank of China is the largest bank in terms of its number of retail customers. 9
…HSBC is the largest group in Hong Kong by the same measure. 10
Significant consolidation occurred in the banking sector between 2000 and 2010. 10
Consumer lending market size and growth 11
Mortgage lending 11
Mortgage balances outstanding increased at a moderate rate between 2010 and 2014…. 11
Non-mortgage lending 12
… and were easily outgrown by non-mortgage credit balances 12
Credit and other pay later cards 13
Credit cards per capita are likely to have reached a record level of 2.59 at the end of 2014 13
Creditor insurance provision rates, operating models and partnerships 14
Creditor insurance linked to mortgages 14
All of the major banks in Hong Kong offer creditor insurance linked to mortgages. 14
Captive underwriters are prominent in terms of weighted partnership shares. 14
.although QBE General features in second place as an external underwriter. 15
.and third-placed Hong Kong Life holds the status of a joint venture underwriter 15
The government-backed HKMC launched the MIP (Mortgage Insurance Program) in 1999. 15
. although this is not included in Finaccord's coverage of mortgage-related creditor insurance. 15
Creditor insurance linked to consumer finance 17
Few lending institutions have introduced schemes for creditor insurance linked to consumer finance. 17
Creditor insurance linked to credit cards 17
. and schemes for credit card payment protection insurance are also few and far between 17
Limited cover for outstanding credit card debt is often bundled with other insurance products 17
Creditor insurance risk coverage 19
A minority of banks promote policies that include cover for temporary incapacity or unemployment 19
Alternative distribution channels 20
Mortgage protection insurance is also available directly from several insurance companies 20
Creditor insurance market size, growth and forecast 20
Mortgage-related cover accounts for the lion's share of Hong Kong's creditor insurance market. 20
. with other policy types somewhat under-developed in comparison 20

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY 1
1.0 INTRODUCTION 3
Banks and other lending institutions in Hong Kong contacted by Finaccord, segmented by type 4
2.0 MARKET ANALYSIS 9
Residential mortgage lending balances outstanding in Hong Kong (absolute and per capita), 2010 to 2014 11
Consumer non-mortgage lending balances outstanding in Hong Kong (absolute and per capita), 2010 to 2014 12
Credit and other pay later cards issued and per capita in Hong Kong, 2010 to 2014 13
Key data points for the consumer lending market in Hong Kong, 2010 to 2014 14
Provision of creditor insurance linked to mortgages in Hong Kong, 2015: provision rate, operating models and weighted provider share of partnerships 16
Provision of creditor insurance linked to credit cards in Hong Kong, 2015: provision rate, operating models and weighted provider share of partnerships 18
Risk coverage of creditor insurance policies in Hong Kong, segmented by type of underlying product, 2015 19
Creditor insurance gross written premiums in Hong Kong, segmented by policy type, 2010, 2014 and 2018 21
Creditor insurance gross written premiums in Hong Kong, segmented by cover type, 2010, 2014 and 2018 21
Creditor insurance gross written premiums in Hong Kong, segmented by policy and cover type, 2010, 2014 and 2018 21

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