ECON 310 Financial Institutions in Hong Kong

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ECON 310 Financial Institutions in Hong
Kong Section 1
Topic Hong Kong Insurance Industry---case
study of Prudential plc
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Group 3 Member list

• Lee Ka Yan, Jennifer (033174)
• Yuen Lai Ying, Rain (033179)
• Wong Yu Hong, Claudio (033190)

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Agenda

• Introduction to HK insurance industry
• Recent development of HK insurance industry
• Trend of insurance industry
• Case study---Introduction to prudential plc
• ---Analysis? market follower
  
• ? products
• Conclusion

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Hong Kong Insurance industry---Two major classes

• For general business--- general liability,
  property damage, accident and health and motor
  vehicle business are the major lines of business
  in terms of gross premiums.
• For long term business---individual life business
  is the most important line in terms of office
  premiums for 2004, Retirement scheme management.
  Remaining are Group life and Annuities and
  others.

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Recent development of HK Insurance Industry

• General Insurance business (take Growth of gross
  premiums as an indicator for development)
• ---from1999 to 2001? increased gradually (HK
  economy
  started to recover)
• ---in 2002?increased sharply (HK economy was
  recovering)
• ----in 2003?decreased dramatically (SARS reduced
  personal consumption)
• ---first three quarters of 2004? negative growth
  (-3.3)
• Effect of SARS persisted
  
  ---in 2005?increased slowly lt4.6gt (HK economy
  started to recover)

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Recent development of HK Insurance Industry

• Long-term Insurance businesses (take Office
  Premiums as an indicator for development)
• ---from 1999 to 2001?gradually increased (HK
  economy started to
  recover)
• ---from 2002 to 2004 (27.4)?increased sharply
  (since
  SARS, more people bought individual life
  insurance)
• ---in 2005?(15.4) degree of increase is smaller
  than 2004

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Trend

• multi-channel distribution for insurance products
  (bank)
• Internet insurance
• CEPA
• foreign insurers and reinsures

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Introduction of Prudential

• established in London in 1848
• The world's 5th largest life and health insurer
  (stock) in terms of revenues
• (source Fortune Magazine, 25 July 2005)
• Standard Poor's (AA)
• Moody's (Aa1 )

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Introduction of Prudential

• providing insurance services to the people of
  Hong Kong since 1964
• over 3,600 insurance consultants, Financial
  Planning Managers and staff

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The Mission

• always listening always understanding

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Market follower
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The Prudential product

• 1.Tradition Life products
• 2.Investment linked products
• 3.Supplementary benefits
• 4.General insurance
• 5.Employee benefits

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Tradition life products

• 1.100 Refundable Crisis Cover Plan
• Aged 16-60
• Covered major diseases
• 2.Best Start Plan
• Children significant saving

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Investment linked products

• Provide life protection
• Full control of investing
• No upfront charge

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Supplementary benefits

• Long term care benefit
• Regular monthly benefit
• Lessen financial burden
• Investment Plus,Term Series,Crisis cover Series
• Juvenile PRUaccident care, Payor Benefits
  Series, Disability Series, Accident Series,
  PRUmed care plan, PRUmed hospital care plan, Lady
  Prudence Plan, etc.

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General insurance

• mainly protect clients for the activities on
  travel, personal accident, clinic, home, maid,
  medical, golfers.
• jointly produced with The Ming An Insurance Co.
  (H.K.) Ltd.
• aims those traveling to mainland China for
  business or leisure frequently.

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General insurance

• Emergency hotline service
• Medical assurance service

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Employee benefits

• MPF Scheme
• 1.BOCI prudential Asset Management Ltd
• Well-defined discipline
• a transparent and prudent investment process, and
  proper risk control
• 2.BOCI-Prudential Trustee Limited

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Internet insurance services on Prudential

• ePolicy
• manage their policies with great ease, anytime
  anywhere.

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• epurchase
• customers can make insurance claims just
  online

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• All online transactions are safe and secure.

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Conclusion

• Growing state
• multi-channel distribution
• Asia, in particular China, continues to be
  viewed by global insurers and reinsurers as the
  region of opportunities
• offers products for people who always travel
  from Hong Kong to China

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Exercise for the Prudential Inc.
If you can answer it, Please raise up your
hand. Thank you!
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Q1 Which of the following (s) is NOT the
trend of the insurance industry in Hong Kong
(a) internet service (b) multi-distribution
channel (c) increase number of foreign insurers
and reinsurers (d) only (a) (b) (e) none
of the above
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Q2 Which of the following (s) about mission
of in Prudential is/are true? (a) always
looking forward (b) always listening always
understanding (c) always speaking (d) all of
the above
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Q3What is/are NOT the categories of product (s)
of Prudential plc (HK) ? (a) Traditional life
products (b) Investment linked products (c)
Supplementary benefits products (d) Super life
products (e) Only (a) (b)