Well-educated mainland Chinese move towards Hong Kong insurance market
She declined to be identified as she was not authorized to speak to the media.
Drawn by lucrative pay, Zhang is part of a growing band of well-educated young Chinese selling insurance in the city to buyers from mainland China who are seeking refuge from a falling yuan and are rattled by healthcare safety fears at home.
These agents are seen as having the edge in winning business from clients from China's upper and middle classes since they have similar educational and social backgrounds.
"Every time the yuan depreciates or when things like the vaccine scandal happen, I get more people panicking and asking about Hong Kong insurance," said Zhang, referring to recent cases in which Chinese companies falsified data and sold ineffective vaccines.
The yuan has dropped more than 6 percent since mid-June amid worsening Chinese economic data, and some forecast it will ease further if a U.S.-China trade dispute intensifies.
According to the Hong Kong Insurance Authority, new business premiums from mainland clients amounted to HK$11.8 billion ($1.50 billion) in the first quarter of 2018, with 95 percent of that spent on medical or protective products.
While that was down 37 percent from the first quarter of 2017, partly due to a decline in endowment and life insurance policies, agents said the number of Chinese clients was rising, especially from middle-class families and millennials.
Li, who oversees about 40 people with a mainland background like hers, said total commissions were growing as much as 50 percent a year.
Agents say Hong Kong insurance provides more comprehensive and higher protection for health issues than mainland products. And insurance savings products denominated in Hong Kong or U.S. dollars are also seen as attractive investments for hedging against falls in the yuan.
Many were taking advantage of a loophole that allowed them to transfer assets across the border beyond the annual limit of $50,000 by swiping UnionPay cards to buy large insurance policies and then using them as collateral to borrow money from Hong Kong banks.
The UnionPay channel was shut by the authorities in 2016, resulting in a drop in sales of policies to mainland customers.
Hong Kong insurance policies are not protected by law on the mainland, making it a legal grey area for mainlanders that choose to buy them - which involves traveling to Hong Kong to sign contracts. But many are willing to take the risk, citing trust in big multinational insurers working from the city.
Thanks to booming demand, successful agents were easily able to qualify for membership in the Million Dollar Round Table (MDRT), a global association of top-earning insurance professionals, Li said.
Most new joiners were able to achieve MDRT's entry requirement of an annual income of HK$533,200 by their second year, she added.
Chiu, originally from mainland China, said he had grappled with entering a trade he deemed low in terms of prestige, but the prospect of high commissions and the business's flexible nature, convinced him to join.
A senior manager at a large insurance company in Hong Kong who holds a Ph.D. said that almost everyone in her team of around 200 people had a master's degree at least. She declined to be identified as she was not authorized to speak to the media.
"Insurance agents with better education are not necessarily better salespeople - on the contrary, many are terrible because they are too proud," she said. "But they tend to come from the circle of people that are spending the most money."
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)