Slow growth in the IPMI market in Hong Kong can be boosted if insurers pay more attention to improving their levels of service and tailoring it more for the local market, according to Steven Luk, executive director of employee benefits for Howden Insurance Brokers in Hong Kong.
Although Mandarin is the official language of China, and is spoken by more than 930 million people, Cantonese – sometimes referred to as a dialect of Chinese – dominates in Hong Kong.
A total of about 68 million people speak Cantonese, including about 88% of the Hong Kong population. The language is also spoken elsewhere, including Macau, the Chinese province of Guangdong and in Malaysia.
The written form of the two languages is largely the same, with Cantonese using traditional characters and Mandarin using the simplified version. But the spoken languages are very different, meaning that speakers of one language can not understand speakers of the other.
But China has been promoting the use of Mandarin across China and the language has been further boosted in Hong Kong through education policy and via immigration from the mainland . It is now thought that more than half of the population have some understanding of the language, up from about a quarter at the time of the handover in 1997.
But despite that growth, Cantonese remains by far the most important language in Hong Kong.
As a result, as IPMI in Hong Kong becomes more popular outside of the traditional market of expatriates to include locals, it becomes even more important for customers to be able to speak Cantonese – not Mandarin – when they approach their insurer’s call centre.
“I think people in Hong Kong still like to talk in Cantonese,” Luk (pictured) said.
“They are looking for more local service – like local customer service support or a hotline based in Hong Kong.”
“So if the insurance companies can give us a Cantonese hotline, that would be great.”
But that would mean hiring staff in Hong Kong or perhaps from Malaysia, as only people from Hong Kong and Malaysia really know how to speak it, Luk noted.
So that would mean call centre staff based in either Hong Kong or Malaysia, or perhaps in the Guangdong province.
“If they want to keep on growing, or really enter the expatriate market or company seniors market, they should have more people to do the service,” Luk said.
““I think the demand for service is really important .
“They have got to have mobile app technology and support those kinds of service as well,” Luk said.
The competitive landscape
Meanwhile two insurers are dominating the Hong Kong IPMI market, primarily Cigna Healthcare and Bupa.
Other insurers include Allianz, which acquired Aetna, as well as APRIL International and Axa Hong Kong and Macau. Of those three APRIL and its MyHEALTH brand is probably the best known.
“There’s not that many insurers in Hong Kong right now that are offering IPMI” Luk said. “There are not that many to choose from.”
As for new insurers entering the market, Luk is cautious about expecting anything to happen soon – and that is linked to the need for increased customer service.
“I think it’s not that easy to enter into the Hong Kong market, because as I said, they’re looking for better service right now – due to the time zone difference and the language.
“So any new insurance provider has got to have good enough people to help with the local service – so it’s not that easy.”
Opportunity in the Greater Bay Area
Another area for growth for IPMI could be the development of the Greater Bay Area (GBA) – which includes Hong Kong and neighbouring Chinese provinces.
The GBA area includes Hong Kong along with Macao, and nine other cities in the Guangdong province including Guangzhou and Shenzen. The total population of the GBA is estimated at about 86 million people – compared to Hong Kong’s population of about 7.5 million people.
But the development of the GBA seems to be at an embryonic stage.
“I know that the insurance industry is pushing to get some results from that. But as you know the Chinese government hasn’t really given specific instruction on that yet,” Luk said.
“They have just promoted it as a sort of ideological plan rather than a true policy to do something.
“We want to enter into that market, but effectively it is more them entering into our market ,rather than us going into their market. So we don’t know yet.
But he is hopeful that the GBA will create a larger market for the insurance broker industry.
“If there is some growth in it or some movement or interaction within the area then that would be a great thing.
“That would be another great opportunity,” Luk concluded.