HSBC Weighs Revamp of Singapore Insurance to Refocus on Hong Kong & China

HSBC’s announcement today that it is reviewing its insurance business in Singapore, HSBC Life Singapore, signals a potential strategic shift away from what the bank classifies as a noncore insurance manufacture arm. The review, which HSBC says is part of its ongoing simplification efforts, will consider all options for that business but emphasizes that no decisions have yet been made. This move appears consistent with a broader rebalancing under Elhedery’s leadership focused on redeploying resources toward better performing, higher growth jurisdictions—especially Hong Kong, mainland China, and India.

Financially, Singapore remains material; it had a pretax profit contribution of about US$1.4 billion in 2024, placing it among HSBC’s more important markets globally. But by contrast, Hong Kong made up nearly US$11.9 billion pretax profit in 2024 and has seen a surge in life insurance new business premiums—HK$93.4 billion in Q1 2025, a 43 percent year-on-year rise. HSBC Life has led the market, with approximately a 21.5 percent share of new premiums in Q1 and strong results in Q2.

From a strategic perspective, the potential exit of Singapore’s insurance manufacturing is a double-edged sword. On one side, it would free up capital and management attention, enabling HSBC to focus on core markets with underpenetrated insurance demand (e.g., mainland China, driven by intergenerational wealth transfers). On the other, it may reduce long-term optionality if Singapore’s regulatory or macroeconomic environment improves insurance margins or demand. Regulatory constraints, tax incentives, and regional positioning all mean that a complete pullback would require careful planning.

Another factor is HSBC’s strength and market share in Hong Kong life insurance, which remains dominant. HSBC Life in Hong Kong held roughly a 21.5 percent share of new business in Q1 2025, and 17.6-19.6 percent in Q2, depending on metric. These stats underpin why HSBC considers Hong Kong and China “core high-growth markets” versus Singapore, where its insurance business is less dominant.

Nevertheless, HSBC has reinforced its commitment to Singapore in other business lines: wealth and wholesale banking are described as priority areas, and HSBC has publicly stated its intention to continue offering insurance products there, even if its own underwriting is scaled down or exited.

Open questions include:

• Valuation expectations: what HSBC believes HSBC Life Singapore is worth, if it proceeds with a sale.
• Regulatory risk: how MAS (Monetary Authority of Singapore) might respond, and how remaining insurance product deliveries would be managed (e.g. via tied agents or product distribution, rather than underwriting).
• Impact on employees, agents, and distribution capabilities if manufacturing ceases.
• Potential competitive advantage for rivals should HSBC pull back underwriting in Singapore.
• Forecasts for margins in Singapore versus projected growth in China/Hong Kong—it remains possible Singapore could rebound or become more profitable in specific lines.