From Canada to HK: A Growing Insurance Market
by Ms. Janet De Silva, Chairman and CEO Sun Life Financial (Hong Kong) Limited

Introduction

In Hong Kong, Sun Life Financial specializes in life insurance and wealth management. In comparison to more mature Western markets, the markets of India, Greater China and Southeast Asia are among the fastest growing life insurance markets in the world.

Business Environment in Hong Kong

When I transferred from Canada, the biggest question on my mind was how to sell life insurance and investment products in an environment where there was no tax incentive for purchasing these products. What I have found is that Hong Kong is one of the best and most receptive markets in which to sell these products. Clients have more disposable income to purchase our products and no tax on investment gains means our insurance products can provide greater benefits for our customers.

Hong Kong is a mature, financially stable market entering a growth stage for the types of financial savings and investment products we sell in North America. We believe we are well-positioned to tailor our North American successes to meet the needs of our Hong Kong customers.

Hong Kong also has a promising future as a growing market. It sits at the heart of China’s most dynamic economic region, the Pearl River Delta (PRD), an area referred to as the “factory of the world”. More than one third of China’s exports originate from this region, manufactured in Hong Kong-owned factories. Hong Kong is an economy oriented to international business. Its use of internationally familiar legal and accounting practices provides a high level of comfort for international business and foreign investors. 

Hong Kong is a city that places a high priority on education and English language skills. Exemplifying this is the number of international schools in the city, and the number of international university graduates who return to work in Hong Kong. For example, there are more than 100,000 Canadian university alumni working in Hong Kong. (Education is Canada’s greatest export product to Hong Kong.) It has a low and simple corporate tax rate of 16% and offers access to highly qualified professional services in areas such as law, accounting and investment banking.

Hong Kong holds promise for Sun Life Financial as a base for further growth in Southern China. It sits at the heart of China’s strongest economic region, the Pearl River Delta, with a per capita GDP of US $9,000, which is much higher than that of Shanghai or Beijing. Hong Kong as a natural market has a GDP per capita of US $25,000 that rivals that of Canada and U.S

Sun Life Financial’s Business in China

Under current WTO regulations, foreign life insurers are granted licenses to operate in specific cities, on a joint venture basis with local partners. In April 2002, Sun Life Financial became the first foreign life insurer to operate a joint venture in Tianjin, which is the second biggest mainland port after Shanghai. The company operates its joint venture with The China Everbright Group. For Sun Life Everbright, being the first foreign insurer in Tianjin has its advantages – we have been able to attract 2,000 life agents and have enjoyed strong sales success since opening our doors nearly one year ago. Strong management, a good joint venture partner and a market with limited competition have been key to our early strong results.

Sharing experience

*  At the risk of stating the obvious, it is important to approach China not as a single market, but rather as a number of separate and distinct markets. And considering that many of these markets can be larger than the Canadian market makes this segmentation exercise an easy approach to accept! The Pearl River Delta, for example, is one of the wealthiest regions in China, with Hong Kong acting as the financial and logistic center for the region. It is a promising region, not only because it is a world-class manufacturing centre, but also because it is rapidly developing into a consumer market. For this reason, Hong Kong is often chosen as the springboard by multi-national corporations to gain entry into the region

*  Product range, distribution approaches and customer sophistication vary among each of these distinct markets

*  Don’t assume that what worked in Canada will automatically work in Asia. Web-based servicing, financial planning approaches, product design and marketing will all need to be tailored

*  The importance of two-way cross-cultural training – as important as it is for ex-pats to be sensitized to the culture of the local market, it is equally important for your local management team to be culturally sensitive to the parent company






This article is contributed by Ms. Janet De Silva, Chairman & CEO Sun Life Financial (Hong Kong) Limited.

(Ms. De Silva is also the President of the Canadian Chamber of Commerce in Hong Kong)

 

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