What are Insurance Companies in Hong Kong?

Insurance in Hong Kong is a complicated business.

There are many different types of insurance you, as a consumer, can buy. From simple and straightforward products like Car Insurance, through to far more complex and important kinds of protection, like Life Insurance and Business Coverage; you have myriad options when it comes to managing the risks you face in your everyday life.

As you may imagine, all this complexity (and the importance of insurance) means that this is a very heavily regulated industry – the Hong Kong Government gives power to the Hong Kong Insurance Authority to make rules over all aspects of insurance in the city. These rules include specifying who or what can sell, or advise, on the different types of insurance products available locally.

There are three main types of organization selling, or providing insurance in Hong Kong:

• Insurance Underwriters
• Insurance Agents
• Insurance Brokers

All three of these companies do slightly different things, and approach serving the customers in different ways.

Hong Kong Insurance Underwriters

The biggest component of the Hong Kong insurance ecosystem is going to be the underwriters – the companies that write the insurance policies which you end up buying. These are the businesses that take on your risk and pay your claims when you experience a loss.

Usually titans of the Financial Services sector, insurance underwriters have names like CIGNA, AXA, Bupa, Liberty, and more - these are the logos you will see on the front of football jerseys.

Some underwriters work with a range of different types of risk – a company like Generali Insurance can provide Car insurance, Travel Insurance, Health Insurance, and an extensive range of Business insurance protection. Some underwriters are highly specialized in their coverage – a company like Aetna focuses on medical protection.

The problem is that there are a lot of underwriters and each underwriter will only offer its own products. This means that going to any given underwriter directly will limit a consumer’s choice within, and understanding of the entire market. It can also be very difficult for a customer to know which underwriter to approach for any given type of protection and even having picked an insurer, there will be no guarantee that the insurance company they have selected will have the products the customer needs.

Hong Kong Insurance Intermediaries

Beyond the underwriters you have the insurance intermediaries – literally a person or organization acting as a link. In Hong Kong insurance these are organizations or individuals who go between the underwriters and customers to make buying insurance easier.

Because insurance as an industry is regulated, intermediaries are also regulated by the Insurance Authority – and every intermediary operating in Hong Kong is required to display their license number on all their promotional materials (including their website, business cards, and brochures).

It is important to realize however, that there are actually two different types of intermediaries in Hong Kong;

• Insurance Agents
• Insurance Brokers

You will be able to distinguish between these two types of organization by their licensing disclosure, but it should be noted that while agents and brokers fill the same function, each of these two types of insurance intermediary operates in a fundamentally different way to the other.

Hong Kong Insurance Agents

While insurance agents are intermediaries in that they are not “employees” of the underwriters, agents are extremely limited in the number of choices they are able to offer.

In most cases an Insurance Agent will be able to offer customers plans from one or maybe two different underwriters. This is because the insurance agent is directly contracted to the underwriter, they have an agency with, and (legally) represent that underwriter. So, while an agent isn’t technically part of an underwriter’s business, they still operate as an extension of one or two insurance providers.

Agents will be experts in the policies they are able to work with, but may run into issues if you are looking for protection beyond the coverage offered by a single insurance underwriter. Further to this, because the agent technically represents the insurer, they are under no obligation to ensure that the customer (that is to say, you) will be purchasing a policy that is right for their needs.

In fact, historically, the unscrupulous behavior of some insurance agents in Hong Kong, particularly in relation to products like Life Insurance necessitated the introduction of regulations to ensure that intermediaries are not soliciting policyholders to switch coverage simply to earn higher commissions.

Hong Kong Insurance Brokers

Insurance Brokers work alongside Agents to provide easy access to insurance for customers in Hong Kong. However, unlike Agents, Insurance Brokers are legally obligated to represent the interests of their customers and not those of the insurance companies.

As CCW Global is an insurance broker, this means that when you choose to seek advice or purchase insurance from us, we are legally required to put your interests first; before our personal interests, the interests of our company, or even the interests of the insurer.

We are obligated to act as a fiduciary for you. This is in Hong Kong law and one of the requirements of our license. This means that if you do not actually need insurance, we must tell you! We are not legally allowed to sell you a product because we can. At every step of the process, we ensure that your needs are at the forefront of every consideration.

This is the same of every Insurance Broker in Hong Kong and is one of the fundamental differences between the two types of intermediaries. When you work with a broker, your needs and requirements come first.

The second big difference between brokers and agents is that an insurance broker can provide coverage options from any underwriter which agrees to work with them. This is the reason that you will see more than 1 or 2 different insurance underwriters listed on our partner’s page. A reputable broker can work with many different insurance providers – giving you the widest range of choice to your coverage possible.

This may not be true of every insurance broker, some brokers (like agents and underwriters) are highly specialized and focus on just one product line. Other brokers, like CCW Global, have teams of expert brokers able to assist you across a wide range of risks and insurance solutions.

Your Insurance in Hong Kong

When it comes to insurance in Hong Kong you, as a consumer, have an exceptional range of choice. From the type of risk you’re covering, through to the type of company or organization you purchase your coverage from, there is a lot to consider.

If you choose to speak to CCW Global we guarantee a no-risk, no-obligation, no-cost consultation process where you only pay for the protection you need. Our expert and dedicated brokers are ready to help you find the perfect insurance solutions for your life today.

Contact CCW Now – we’re simplifying insurance.