ECON 310 Financial Institutions in Hong Kong Section 1 Topic: Hong Kong Insurance Industry ---case study of Prudential plc

Group 3 Member list Lee Ka Yan, Jennifer (033174) Yuen Lai Ying, Rain (033179) Wong Yu Hong, Claudio (033190)

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

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.

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 <+4.6%> (HK economy started to recover)

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

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

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 )

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

The Mission always listening always understanding

Market follower

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

Tradition life products 1.100% Refundable Crisis Cover Plan Aged 16-60 Covered major diseases 2.Best Start Plan Children significant saving

Investment linked products Provide life protection Full control of investing No upfront charge

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.

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.

General insurance Emergency hotline service Medical assurance service

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

Internet insurance services on Prudential e+Policy manage their policies with great ease, anytime anywhere.

e+purchase customers can make insurance claims just online

All online transactions are safe and secure.

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

Exercise for the Prudential Inc. If you can answer it, Please raise up your hand. Thank you!

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

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

Q3 What 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)