Hong Kong’s Evolving Role as a Financial Hub

Post-Covid, global mobility has been sluggish in Hong Kong, slower than in many other regions. This trend is mirrored in the expatriate demographic, which now tends to be younger and less represented in senior positions. There’s a growing perception that Hong Kong might pivot from being a global financial hub to becoming more of a financial center primarily serving China—a significant shift, though still crucial.

Adapting Insurance Products to New Realities

The economic aftermath of the pandemic has led to new expatriates arriving with tighter budgets, particularly concerning medical insurance. This financial constraint requires insurers to innovate and creatively develop products that balance coverage with the escalating medical costs, which are driving sharp premium increases. Despite the rising need for comprehensive medical insurance, there’s a noticeable uptick in demand for group life insurance, though it remains secondary.

Workplace Trends and Implications for Medical Claims

Unlike the global trend of adopting hybrid work models, most staff in Hong Kong have returned to a traditional five-day office week. This shift has inadvertently led to an increase in medical claims across various sectors. The primary concern now lies in the unsustainable rise of medical costs, with Hong Kong trailing only behind the US. High charges from surgeons, doctors, and specialists in an unregulated market exacerbate the challenge, pushing the medical insurance industry to its limits in trying to balance client coverage demands with maintaining reasonable premiums.

Sustainability of the Insurance Market

The financial strain has already driven many international insurance providers out of the Hong Kong market, leaving a handful of onshore providers. This reduction in providers puts additional pressure on the remaining insurers to manage rising demands and spiraling costs without governmental intervention. The industry relies heavily on brokers to help regulate and control costs through ‘reasonable and customary’ charges. Without collective action and stringent cost control measures, the industry risks collapsing, reducing the capacity to cover individuals adequately and limiting consumer choices.

Consumer Adaptations and Industry Outlook

Given the high costs of comprehensive international medical policies, more clients are opting for major medical insurance only, choosing to pay out-of-pocket for other services like outpatient, dental, or maternity care. This trend is not confined to Hong Kong but is also seen in other Asian markets like Singapore and Thailand, although it is more pronounced in Hong Kong.

The Broader Industry Challenge

The insurance industry faces a broader challenge in attracting new talent. The sector struggles to appeal to the younger generation, who prefer careers in IT or finance over insurance. This trend could have long-term implications on the industry’s capacity to innovate and sustain itself.


The insurance industry in Hong Kong, particularly in the medical sector, stands at a critical juncture. Facing rising costs, changing demographics, and a shifting economic landscape, insurers and brokers must take proactive steps to control costs and innovate responsibly. Such measures are essential not only for the sustainability of the industry but also for ensuring that Hong Kong remains a competitive player on the global financial stage.