30-year guaranteed compound interest of 3.5%, this Hong Kong savings insurance product is "on fire before hitting the market"! Chinese-funded Hong Kong insurance eyes mainland customers, do products need to be "localized for mainland market"?

Recently, a high-guaranteed return product sold in Hong Kong has attracted attention in the insurance industry. Several insurance brokers revealed that this product, under China Pacific Insurance’s Hong Kong life insurance plan, is scheduled to launch on March 5. It offers a 30-year guaranteed compound interest rate of up to 3.5%. Based on the return speed, the cash value of the product can exceed the premiums paid by the sixth year, outperforming many similar products in the market.

Typically, Hong Kong insurance policies feature a “low guaranteed interest rate + high expected dividend income” model. Although the guaranteed rate is as low as 0-0.5%, the high expected returns are a key factor in attracting customers. Recently, China Life (Hong Kong) launched the first dividend whole life insurance in mainland China with a preset interest rate of 1.25%, setting a new industry low for minimum guaranteed returns on dividend insurance in mainland China, indicating a certain “Hong Kongization” trend in mainland dividend insurance.

In contrast, this upcoming new product in Hong Kong takes a different approach. With the core selling point of “high-yield savings insurance,” it sharply contrasts with the mainstream local market and the “Hong Kongization” trend of mainland dividend insurance.

According to the Daily Economic News, China Pacific Insurance Hong Kong has been established for four years and is one of the later entrants among Chinese-funded insurance companies into the Hong Kong market. Notably, how does this product achieve high guaranteed returns? Under the background of Chinese-funded Hong Kong insurers competing for mainland investors, will “mainlandization” of Hong Kong insurance become a new phenomenon?

“Quota of 500 million yuan, scarce guaranteed income slots, first come, first served!” “30-year term with 3.5% guaranteed, no dividends, all benefits clearly written in the contract.” This new product, expected to be launched in Hong Kong in March, has recently been heavily promoted by many insurance brokers. Currently, it has not yet been officially announced on China Pacific Insurance Hong Kong’s channels.

From promotional materials, this savings plan involves a 3-year premium payment period, a 30-year coverage period, and a broad age range for applicants, up to 80 years old. In terms of coverage, early death benefits pay 120% of the total premiums, with an additional 100% accidental death benefit in the first five years. It also supports policyholder conversions, enabling wealth transfer functions. The most notable feature is the guaranteed return: with a prepayment discount rate of 4.5%, the product’s 30-year simple interest can reach 6.1%, with guaranteed compound interest (i.e., actual yield IRR) up to 3.5%.

Senior actuary Xu Yuchen told the Daily Economic News that China Pacific Insurance Hong Kong can design relatively high-yield products thanks to the higher base interest rate environment in the U.S. dollar market. The product uses a dual-currency design in HKD and USD, and its high return performance is highly correlated with the USD as the denomination currency. Xu Yuchen believes that for mainland investors who prefer high-guarantee financial products, this product undoubtedly meets their need for stable returns.

Against the backdrop of continuously falling global interest rates, variable-yield dividend insurance has become increasingly mainstream. Meanwhile, the preset interest rate for mainland savings insurance has been lowered to 2%. Given this context, why are insurance companies willing to launch such high-guaranteed return products?

“We notice that traditional high-guarantee return products in Hong Kong are mainly short- to medium-term, such as 3- or 5-year policies, whereas China Pacific Insurance Hong Kong plans to significantly extend the insurance period, up to 30 years,” Xu Yuchen explained. The asset supporting the product’s returns is most likely U.S. Treasury bonds, with durations closely matching the policy terms, mainly allocated to long-term fixed income assets of 20 to 30 years.

Additionally, setting certain sales quotas and time limits is an important way for insurers to control business risks. “From the policy term perspective, this product does not adopt the lifetime design like the mainland’s 3.5% increasing whole life insurance, but limits the insurance period within 30 years,” he added.

The “mainlandization” trend reflected in Hong Kong insurance products reveals the market phenomenon of Chinese-funded Hong Kong insurers competing for mainland clients.

For example, China Pacific Insurance Hong Kong, a Hong Kong-based insurer with a Chinese background, mainly serves mainland investors who purchase policies in Hong Kong. Last year, the company launched a dividend insurance product with a guaranteed interest rate of 2.5%. Thanks to its high guaranteed rate, high expected dividends, and high cash value, it aimed to attract mid- to high-end mainland clients.

In December 2021, China Pacific Insurance (Hong Kong) was officially established as a subsidiary of China Pacific Insurance, engaging in long-term life and health insurance. At that time, China Pacific Insurance stated that the establishment of the Hong Kong company would help seize the strategic opportunity of the Greater Bay Area development, with the vision of becoming the “best customer experience Hong Kong life insurer,” providing services to both mainland and Hong Kong clients.

As a strategic gateway for the China Pacific Insurance Group’s internationalization, the Hong Kong subsidiary benefits from the parent company’s capital support. Notably, China Pacific Insurance (Hong Kong) completed a HKD 3 billion capital increase at the end of last year, further strengthening its competitiveness in the Hong Kong market. This also demonstrates the group’s emphasis on the Hong Kong insurance market.

Other early-established Chinese-funded Hong Kong insurers include China Life (Overseas), BOC Life, and Taiping Life (Hong Kong). China Life (Overseas) has the longest history, with its Hong Kong branch established in 1984, now the largest Chinese-funded insurer and institutional investor in Hong Kong. By 2025, its total assets reached HKD 452.8 billion.

BOC Life was founded in 1998, with shareholders including BOC Hong Kong (Holdings) Limited and BOC Group Insurance Limited. Relying on strong banking channels, BOC Life has recently led growth among Chinese-funded Hong Kong insurers and maintains a leading position in the Hong Kong RMB insurance market. Taiping Life (Hong Kong) opened in 2015, with total assets approaching HKD 90 billion in 2024.

Industry insiders believe that Chinese-funded Hong Kong insurers, with both state-owned background and overseas asset allocation advantages, are favored by mainland investors purchasing policies in Hong Kong. The reporter notes that, aside from China Pacific Insurance Hong Kong, other Chinese-funded Hong Kong insurers have not yet launched similar high-guaranteed fixed income products.

It is also worth noting that Chinese-funded Hong Kong insurers are leveraging elderly care services as a differentiating competitive advantage to attract clients from Hong Kong and mainland China.

For example, the new product soon to be launched by China Pacific Insurance Hong Kong includes the right to reside in Taiping’s Elderly Care Community (“Taiping Home”). Currently, Taiping Home has established 15 elderly communities across 13 mainland cities, forming a comprehensive national elderly care network.

Taiping Life (Hong Kong) has integrated China Taiping’s mainland “Continuing Care Retirement Community” (CCRC) service system with Hong Kong insurance products, offering high-quality, full-age elderly care options.

In recent years, Hong Kong’s status as an international financial center, its mature capital markets, and cross-border financial cooperation with mainland China have made it a core location for Chinese-funded insurers’ overseas expansion. Leading insurers have established licensed subsidiaries in Hong Kong, creating platforms for overseas licensing and opening channels for global asset allocation, forming a “product + asset management” dual-driven model.

Recently, several Hong Kong insurance asset management companies have received capital injections from their parent companies. In November 2025, New China Life Insurance approved a HKD 154 million capital increase for New China Asset Management (Hong Kong). In February 2026, Sunshine Insurance announced related-party transactions, disclosing plans for subsidiaries to increase capital in Sunshine Asset Management (Hong Kong), with planned investments of up to HKD 250 million and HKD 750 million respectively. After the increase, the share capital of Sunshine Asset Management (Hong Kong) will rise from HKD 100 million to HKD 1.1 billion. This capital increase occurred less than a year after the company’s official opening in March 2025.

“Global asset allocation and international expansion of insurance funds are inevitable paths for the professionalization and internationalization of China’s insurance asset management industry,” said Sunshine Insurance. The necessity of this capital increase mainly reflects four aspects: aligning with global insurance asset management trends, meeting the internal needs of China’s insurance industry for healthy development, reducing risks from single markets, and actively responding to the challenges of globalization and large-scale asset management.

In terms of business deployment, many Chinese-funded insurance asset management subsidiaries in Hong Kong have obtained core licenses from the Hong Kong Securities and Futures Commission, including Type 1 (securities trading), Type 4 (advisory), and Type 9 (asset management). Some also hold QFII, RQFII, and Hong Kong stock investment advisory qualifications, covering overseas investment management for group insurance funds, public offerings for external clients, and Mandatory Provident Fund management, forming a “serving the group + expanding third parties” business model.

In asset allocation, Hong Kong stocks have become a key target for insurance capital going abroad. Since 2025, insurance capital has made over 40 equity acquisitions, most of which are Hong Kong stocks. H-shares of banks, with high dividends, stable payouts, and attractive valuations, are the preferred targets. According to the latest survey by the China Banking and Insurance Asset Management Association for 2026, Hong Kong stocks are the most favored overseas investment for insurance institutions, with half planning to slightly increase their holdings and 40% maintaining current allocations.