Findings of the first Mortality Protection Gap Study conducted by the Insurance Authority
25 August 2021
The Insurance Authority (IA) published findings of the first Mortality Protection Gap Study (the Study) today (25 August 2021), which indicate that total mortality protection gap in Hong Kong is estimated to be HK$6.9 trillion in 2019, translating into HK$1.9 million or 5.7 times the weighted average annual income for each working adult.
Mortality protection gap is a term used to describe impact caused by premature death of the breadwinner after matching protection needs1with available resources2. The existence of a gap means that dependents would not be able to maintain the same living standards and eventually might apply for social assistance.
“Despite achieving top global ranking in terms of insurance density and penetration, the market in Hong Kong is heavily dominated by products with saving or investment features that could overshadow the basic function of personal safeguard. There is therefore ample scope for insurance to be used as an effective tool to mitigate against unexpected events,” said Mr Clement Cheung, Chief Executive Officer of IA.
“Life is full of perils, and it is incumbent upon every individual to understand more about his or her evolving exposure. To this end, findings of the Study will shed light on the importance of lifetime risk profiling and mitigation,” Mr Cheung added.
A full set of the findings are available on the IA website.
Ends
Notes:
1 Medical care of dependents, education of children, household expenditure and outstanding debt.
2 Bank deposits, equities and ETFs listed or traded on Hong Kong Stock Exchange and other relevant products (e.g. REITs, bonds and derivatives), mutual funds, retirement schemes and long term insurance policies.