24 February 2022ILS

Hong Kong continues quest to develop captive domicile

According to its Insurance Authority’s  annual report, captive insurance remains one of four pillars of policy initiatives to make Hong Kong a more attractive hub for international trade. The other pillars are insurance-linked securities, marine and specialty risk insurance, and reinsurance.

The report details a range of initiatives over the year in review to promote Hong Kong as a captive domicile. They include legislative amendments to expand the scope of insurable risks by captive insurers in Hong Kong, which came into effect in March 2021, and the formation of the Hong Kong Specialty Risks Consortium “to help match demand and supply in the specialty risks area”.

“Under the orchestration of the IA, the Consortium pools risk owners with exposure to specialty risks in their overseas projects, with service providers such as reinsurers, insurers, and insurance brokers that can offer suitable risk management and reinsurance and insurance solutions. This makes it more convenient for risk owners such as captive insurers to use Hong Kong as a risk management hub for offshore risks,” the report continues.

Over 100 executives also attended its Captive Forum Webinar in October 2020, it notes.

“As risk management platforms for large enterprises, captive insurers can be a key source of demand for a wide range of sophisticated risk management and reinsurance and insurance solutions. Moreover, Hong Kong’s proximity to the mainland and its role as an international financial centre within national boundaries make it an ideal captive domicile for mainland enterprises with overseas projects,” it states.