Special Report – Macau’s insurance industry

By
João Paulo Meneses

Macau Business | November 2022 | Special Report | Macau’s insurance industry

Enduring and thriving amid the pandemic

How can one understand that the first text of this special report on the insurance sector in Macau is entitled “2021: the ‘good’pandemic..” and the last “The insurance industry is able to maintain steady growth in spite of the pandemic” (from an exclusive opinion article by the Director of the Insurance Supervision Department of the Monetary Authority of Macau)?

If it is true that the pandemic has been disastrous for the economy in general (not to mention people), there are some rare exceptions that seem to be left unscathed to a great extent—insurance, namely life insurance, is one of them.

As Félix Pontes, former AMCM’s Executive Director and Insurance Commissioner, explains in this special report, local companies offer “much more diversified products than the Chinese insurance companies: wider range of insurance cover and more options in terms of currency of the insured capital, namely in the American dollars (in China, the insurance policies are only denominated in Renminbi).”

In the following pages, we will also address pandemic-related risks, opportunities, and challenges for local insurance firms in setting their foothold in Hengqin and the risks associated with the use of virtual currencies.

Co-ordinated by João Paulo Meneses [email protected]

2021: The ‘good’ pandemic

After losses in 2018 and 2020, profits came to the insurance sector in 2021. Explanation: The sale of insurance policies, taking advantage of the border restrictions between Hong Kong and the mainland.

… and the ‘bad’ pandemic

The pandemic may have been good for the accounts of some insurance companies, but the Monetary Authority warns of problems.

Good life

The end-2021 accounts for most insurers operating in the SAR’s life segment were rosy.

AMCM’s work

The market evolves so quickly that the regulator’s job is never done

Hengqin waiting for Macau insurers

As Professor Henry Lei explains to Macau Business, “as the new laws and regulations governing the insurance operations in the ICZ have not yet been released, the extent of liberalisation in the opening up process is far from clear, local insurance companies are hesitating to set up their service centres in the ICZ.”

The case for an export credit insurance scheme

There is still a lack of an effective system of protection for exports and imports, something essential to Macau’s role as a Sino-Lusophone platform

Mainlanders prefer USD-denominated insurance policies

If it is true that in 2021, the money that mainland visitors spent on insurance in the MSAR was six times higher than that recorded in Hong Kong, this is due to the sale of life insurance, especially denominated in US dollar

A universal healthcare insurance system?

Leading expert in health economics and finance notes that “It is not advisable to switch to universal healthcare insurance”, considering the advantages of the SAR’s healthcare model

Virtual currencies, yes or no? Yes and no

Opinions are divided on the pros and cons of using digital currencies in the insurance market

“The insurance industry is able to maintain steady growth in spite of the pandemic”

— Doris Chan, Director of the Insurance Supervision Department of the Monetary Authority of Macau