In the context of the mainland China market facing an asset shortage and declining bank interest rates, many high-net-worth individuals are seeking alternative investment options. Hong Kong savings-type insurance has emerged as a popular choice due to its long-term compound interest growth, multi-currency allocation, and high dividend realization rate. However, concerns remain about the reliability of Hong Kong insurance companies and the potential for bankruptcy. To address these concerns, veteran insurer Manulife Insurance offers insights into the robust regulatory framework and asset management practices that underpin the reliability of Hong Kong savings-type insurance.
Multi-Dimensional Supervision: Building a Safe Investment Environment
The reliability of Hong Kong savings-type insurance is fundamentally supported by the strict regulatory environment. Section 6 of the Insurance Companies Ordinance stipulates that only authorized insurance companies, Lloyd’s, or underwriting organizations recognized by the Insurance Authority can conduct insurance business in Hong Kong. This ensures that companies must meet high-threshold capital requirements and maintain transparency in solvency reporting. For example, Wantong Insurance maintained a solvency adequacy ratio of over 240% in 2024, significantly higher than the regulatory minimum of 100%. The company’s major equity shareholder, Wantong Life Insurance of the United States, holds top-tier credit ratings from A.M. Best (A++), Moody’s (Aa3), S&P (AA+), and Fitch (AA+). Additionally, Wantong Insurance’s asset management is handled by Barings Asset Management, an institution with over 260 years of experience. These factors collectively ensure the stability and reliability of the insurance products offered.
Bankruptcy Protection: A Safety Net for Policyholders
Despite the strict regulatory framework, the possibility of an insurance company going bankrupt cannot be entirely ruled out. However, the Hong Kong insurance market is equipped with a well-developed protection mechanism to safeguard policyholders’ interests. The Insurance Ordinance of Hong Kong provides detailed provisions for handling bankruptcy situations. Even if an insurance company goes bankrupt, the policy remains valid, and the policyholders’ interests are protected. This legal safety net ensures that investors can have confidence in the long-term stability of their investments.
Investment Strategies: Balancing Returns and Risks
Mainstream insurance companies in Hong Kong prioritize balanced and diversified investment strategies to manage risks effectively. A notable feature is the high proportion of fixed-income assets maintained by companies like Wantong and Prudential. Wantong Insurance, for instance, has an internal professional investment team and entrusts 80% of its underlying assets and 99% of its fixed-income investments to Barings Asset Management. As a globally renowned “fixed income expert,” Barings has a highly effective investment team that has won numerous awards in fixed income. This partnership helps Wantong Insurance consolidate its investment base and protect client rights.
Global Resources and Diversified Investment Portfolios
As a subsidiary of Manulife of the United States, Barings brings extensive experience in managing life insurance funds. Relying on over a century of investment experience and resource accumulation, Wantong Insurance adopts a global diversified investment strategy with a high allocation to fixed-income assets. This approach ensures that the investment portfolio remains stable even in volatile markets. Through Barings, Wantong Insurance accesses a globally diversified fixed-income investment portfolio, providing long-term stable returns.
Conclusion: A Reliable Choice for Wealth Preservation
In an uncertain investment market, Hong Kong savings-type insurance stands out as a reliable option for high-net-worth families seeking to preserve and pass on wealth. The reliability of these products is underpinned by the strict regulatory framework of the Hong Kong insurance market, the professional and stable investment strategies of insurers like Manulife and Prudential, and the outstanding asset management capabilities of institutions like Barings. While investors should always be aware of the inherent risks in any investment, the combination of legal safeguards, robust regulation, and experienced asset management makes Hong Kong savings-type insurance a trustworthy choice.
Related Topics:
