Insurance Authority hosts forum to discuss risk transfer and project finance for Belt and Road projects
11 September 2019
The Insurance Authority (IA) today (11 September 2019) hosted a thematic breakout forum at the Belt and Road Summit1, featuring the importance of risk management in projects under the Belt and Road Initiative (BRI), and showcasing how Hong Kong has carved out a niche for itself to become an insurance and reinsurance hub and a risk management centre for BRI projects.
The forum brought together a panel of experts from the (re)insurance, captive insurance, banking and risk management sectors. The speakers shared their views and experience to demonstrate how insurance and project finance are interlinked to underpin the commercial viability of enterprises, especially State-owned Enterprises (SOEs), investing in BRI projects.
“Insurance, as the most important instrument for bridging risk transfer and project finance, helps SOEs meet the expectations of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) for safeguarding national assets and mitigating potential loss for their BRI projects,” said Mr Simon Lam, Executive Director of General Business of the IA.
“With the strong presence of multinational insurers and reinsurers, and a deep talent pool of risk management and insurance professionals, Hong Kong has the experience and expertise to provide professional risk management services and effective insurance and reinsurance solutions for the BRI projects of SOEs, and thus address the challenges faced by these infrastructural developments,” he said.
Mr Lam added that with the support of the Mainland authorities, the IA has been stepping up its efforts to promote Hong Kong as a risk management centre for the BRI. In December 2018, the IA launched the Belt and Road Insurance Exchange and Facilitation (BRIEF) platform to promote the exchange of intelligence, forge alliances, and facilitate networking among relevant stakeholders. Currently, the platform has 39 members, including insurers, reinsurers, captive insurers and insurance brokers. For details please refer to the BRIEF website. In the same month, the IA authorized the first captive insurer after it started regulating the industry in June 2017, bringing the total number of captive insurers in Hong Kong to four.
In July this year, the China Banking and Insurance Regulatory Commission (CBIRC) extended its preferential treatment to Hong Kong under the “China Risk Oriented Solvency System”, allowing lower capital requirements for Mainland insurers who cede businesses to qualified Hong Kong professional reinsurers. This treatment will help Hong Kong reinsurers participate and assist in BRI projects.
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Note:
1The aim of 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 to explore opportunities in different sectors under the Belt and Road Initiative. It also features an investment and business matching session, providing participants from different countries and sectors with opportunities to identify potential partners and exchange business ideas.
The Insurance Authority hosts a thematic breakout forum, with a panel of experts from the (re)insurance, captive insurance, banking and risk management sectors to discuss the importance of risk management in projects under the Belt and Road Initiative.