The total mortality protection gap (MPG) in Hong Kong was estimated to be HK$6.9tn ($890bn) in 2019, translating into HK$1.9m or 5.7 times the weighted average annual income for each working adult, according to findings of the first Mortality Protection Gap Study published by the Insurance Authority (IA).
“Despite achieving top global ranking in terms of insurance density and penetration, the market in Hong Kong is heavily dominated by products with savings or investment features that could overshadow the basic function of personal safeguard. There is, therefore, ample scope for insurance to be used as an effective tool to mitigate against unexpected events,” said IA CEO Clement Cheung.
The study revealed that the size of the MPG depends on an individual’s demographic profile, household mix and financial condition. Further, different career paths and life plans change one’s protection needs significantly across their life span. These changes expose policyholders to changing mortality risk, which unless addressed, can have a devastating impact on a family.
A discussion of mortality risk should be viewed as the IA’s first step in studying the Hong Kong insurance market. The IA will identify meaningful topics to further promote a better understanding of insurance products and the insurance industry among existing and potential policyholders, as a pathway to achieving and maintaining a successful and educated insurance market.