BOC Group Life Assurance Co. Ltd. is guaranteeing clients 300 basis points of compensation on the exchange rate for renminbi-denominated insurance policies to lower policy risks as the currency depreciates, the Hong Kong Economic Journal reported, citing chief executive Terry Lo Kin-wing.
The pledge by the BOC Hong Kong (Holdings) Ltd. (02388.HK) subsidiary offsets a recent 3 percent drop in the exchange rate of the RMB and is believed to be the first of its kind in the city.
Lo said the currency still has potential to rise over the long term and the insurer will continue its expansion in the RMB life insurance market despite the currency’s growing volatility.
But the guarantee only applies to first-time buyers and specific products over a set time.
Lo, who joined the insurer last summer and took the helm at the end of last year, said he wants to expand the Hong Kong-based company’s presence in Asia over the next five years, aiming to quintuple the share of its premium income from non-bancassurance from 5 percent now.
The insurer has a new sales force with about 40 agents, which will grow to 100 by the end of this year. It will also work with nine independent financial advisory firms and insurance brokerages.
The insurer posted a total premium income of HK$18 billion (US$2.32 billion) last year, up 51 percent from 2012. Gross premium from new business rose 71 percent to HK$10.6 billion.
Overall business momentum in the first quarter of this year remained robust, with income from RMB policies representing more than half of the total, Lo added.
– Contact us at [email protected]