Insurance professionals discuss Hong Kong’s role in supporting the national strategy of dual circulation through captives and reinsurance
1 September 2021
The Insurance Authority (IA) today (1 September 2021) hosted a thematic breakout forum at the Belt and Road Summit1 to discuss how Hong Kong can leverage its advantages as a captive domicile and reinsurance hub to consolidate its strategic position under the 14th Five-Year Plan as the risk management centre for Mainland enterprises “going global”.
The forum brought together a panel of senior executives from a mainland insurer, an insurance consultant specialising in overseas projects of Mainland enterprises, an international reinsurer and a mainland captive insurer, all of whom have extensive experience in supporting Mainland enterprises to manage their overseas projects’ risks with risk management services and insurance solutions. They provided insights into how Hong Kong, sitting at the nexus of domestic-international dual circulation, can support Mainland enterprises “going global” and by doing so fulfil its role as the risk management centre for the Mainland.
“Under the current geopolitical environment, Hong Kong, as a special administrative region of China, is playing an increasingly significant role in the global financial and insurance market. The establishment of captive insurance companies in Hong Kong has become a primary risk management solution for Mainland enterprises to actively manage their overseas projects’ risks,” said Mr Simon Lam, Executive Director of General Business of the IA. “In the long run, these businesses will provide impetus to the insurance ecosystem in Hong Kong and reinforce our position as a global risk management centre and a regional (re)insurance hub.”
The forum discussion also covered a wide range of key issues, including how to enhance the awareness of enterprises of risk management to cope with the new risk landscape caused by the pandemic and geopolitical risks; the importance of adopting a proactive approach and control in risk management; and optimising co-operation between the Hong Kong, Mainland and international insurance markets.
“With the coming into effect of the legislative amendment in March 2021 to expand the scope of insurable risks by captives, and the further extension of preferential treatment by the China Banking and Insurance Regulatory Commission (CBIRC) for Hong Kong qualified reinsurers under the China Risk Oriented Solvency System2, Hong Kong stands ready to provide full support to Mainland enterprises on the risk management of their overseas projects,” Mr Lam added.
Ends
Notes:
1 The Belt and Road Summit, co-organised by the Government of the Hong Kong Special Administrative Region and the Hong Kong Trade Development Council, is a premier international platform for promoting business collaboration along the Belt and Road. The Summit gathers senior government officials and business leaders from countries and regions along and beyond the Belt and Road to exchange insights on multilateral co-operation and explore concrete business opportunities.
2 The China Banking and Insurance Regulatory Commission (CBIRC) announced an extension of the preferential treatment accorded to Hong Kong under the “China Risk Oriented Solvency System” for another year to 30 June 2022, thus allowing the capital requirement of Mainland insurers ceding businesses to qualified Hong Kong professional reinsurers to be continuously lowered. Please refer to the press release for details.
The Insurance Authority (IA) hosted a thematic breakout session to discuss with insurance professionals how Hong Kong can leverage its advantages as a captive domicile and reinsurance hub to consolidate its strategic position as the risk management centre for Mainland enterprises “going global”.