Financial regulatory bodies of Hong Kong, Macao and the Chinese mainland will strengthen their communication to fine-tune the insurance market of Guangdong-Hong Kong-Macao Greater Bay Area to allow more Hong Kong-based insurers to tap the market.

"The three parties strive to fine-tune the market entry system of the city cluster's insurance market, thus allowing Hong Kong-based insurers to operate their businesses in the Bay Area, and supporting Hong Kong as a global risk management center and a regional insurance hub," Liu Fuzhou, chief attorney of the China Banking and Insurance Regulatory Commission, told the Asian Insurance Forum 2019 in Hong Kong on Tuesday.

Financial Secretary Paul Chan Mo-po also said at the summit: "The Bay Area blueprint and the Agreement Concerning Amendment to the mainland and Hong Kong Closer Economic Partnership Arrangement Agreement on Trade in Services can fortify the regional competitiveness of the local insurance industry."

The amendment document signed in November introduces new liberalization measures in several important services sector such as financial and legal services by making it easier for Hong Kong service providers to set up enterprises and develop business on the mainland.

Hong Kong and the mainland are mulling an insurance connect, which would allow insurance products of Hong Kong and mainland insurers to be sold in each other's markets, as another channel for promoting mutual access to each other's capital market, along with the Shanghai-Hong Kong Stock Connect launched in 2014, the Mainland-Hong Kong Mutual Recognition of Funds in 2015, the Shenzhen-Hong Kong Stock Connect in 2016, and the Bond Connect in 2017.

However, in September, the insurance connect program was reported to be on hold as global trade tensions and violent protests in Hong Kong affected the business environment. Sales of insurance policies to mainland customers tumbled as a result.

"When Hong Kong returns to normal, mainland residents will visit the city to purchase insurance policies because they have a demand for such policies. Therefore, we predict the slump of mainland customers in the fourth quarter will not be huge compared to the third quarter," Insurance Authority (IA) CEO Clement Cheung Wan-ching said.

According to IA figures, the business volume of insurance policies issued to mainland customers plunged nearly 30 percent in the third quarter from the previous quarter.