Life insurance business outpaced industry growth with APE jumping 30%, launching VHIS plans with four-month premium discount, and instant underwriting and claims services
FWD Hong Kong (“FWD”) today announced record business results for 2018 and its strategic focuses for 2019. The life insurance business Annual Premium Equivalent (APE) [note 1] jumped 30% to HK$2,875 million, driven by strong growth momentum across all its channels and outstanding investment returns.
Ken Lau, FWD Managing Director of Greater China & Hong Kong Chief Executive Officer, said, "We’re very proud to conclude the year on such a strong note, significantly outpacing the industry’s average growth performance. These impressive results achieved in a rapidly shifting market landscape were due to our competitive multi-channel distribution capabilities, developing a comprehensive platform of demand-led product innovation, and continued technology investments. We will continue to take hold of emerging opportunities and deliver growth while offering fresh customer experiences.”
FWD recorded solid growth across its main businesses in 2018:
- The life insurance business (including Macau operations): Profit before taxation (PBT) [note 2] rose 12% year-on-year (YoY) to HK$333 million, successfully sustaining a growth trajectory over the past six years. Investments to build and enhance its health and protection proposition paid off, contributing to 35% of Value of New Business (VNB).
- The general insurance business maintained sustainable growth in a competitive market with a near 5% rise in gross written premiums reaching HK$512 million.
Highlights on market and distribution channels
FWD’s strategic expansion of its multiple channels, coupled with favourable demand for products by Mainland Chinese visitors, resulted in an impressive performance for the year.
- Multiple distribution channels: Tied agency continued to be the largest contributor of revenue which achieved 34% of YoY APE growth. Brokerage recorded an impressive YoY growth at 53% in APE, and rose to top-6 in terms of market share. Bancassurance recorded 28% of YoY APE growth thanks to strong partnerships with key bank partners. The direct channel further cemented FWD’s recognised leadership in direct sales of life insurance.
- The continued strong demand of Mainland Chinese visitors for FWD’s protection products proved to be a positive source of growth. In 2018, APE for FWD Hong Kong’s life business from mainland Chinese visitors saw 45% YoY growth compared to the market average at 9% [note 3]. Health and protection products were a particular highlight, with YoY APE growing 58% compared to 23% for the overall market [note 3].
“We will closely monitor the developments in the Greater Bay Area and look for opportunities to support its growth,” continued Ken.
Jeff Wong, FWD Hong Kong & Macau Chief Agency Officer, noted that the company made great strides in expanding its agency force in 2018, and said, “Our plan is to further increase our agency force to 3,600 in 2019 and 5,000 in five years-time.”
2019 Key Products and Services Initiatives
In line with its strategic priorities on total health protection solutions, retirement protection and disruptive claims services, FWD also launched three certified Voluntary Health Insurance Scheme (VHIS) plans, two standard plans VChoice and vCore, and one flexi plan vCare [note 4]. All three plans were among the first lot of certified VHIS plans announced by Hong Kong’s Food and Hygiene Bureau. A four-month premium discount for the first policy year is available for vCare and vCore medical plans from immediately until end of June (see Table 1 for more plans information).
Paul Tse, Chief Marketing Officer at FWD Hong Kong & Macau, remarked, “As part of our perpetual commitment to enhance our customer experience, we will continue to streamline our underwriting and claims services while enriching our health protection portfolio with VHIS plans and a diverse suite of innovative products.”
FWD is also rolling out instant underwriting and claims services, as well as upgraded round-the-clock enquiries services to further boost customer experience (see Table 2 for details). Some of them include instant underwriting for savings and health protection products of the life insurance business, and 30-minute approval and payments for medical insurance claims of up to HK$100,000 at FWD Insurance Solution Centres.
“Customers are at the heart of our business. We will continue to leverage technology to offer transparent and efficient services to give our customers the experiences they deserve,” concluded Paul.
- APE (Annual Premium Equivalent) = Value of regular premiums, plus 10 % of any new single premiums written for the year.
- IFRS figures (for Life Insurance & General Insurance businesses), excluding one-off items, holding company expenses and inter-company elimination.
- Source: Quarterly Release of Provisional Statistics for Long Term Business 2018, Insurance Authority of Hong Kong.
- For details of FWD’s VHIS plans, please go to https://www.fwd.com.hk/en/protect/health-accident/vhis/.
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