Hong Kong remains committed to insurance and captives, says region chief executive

Hong Kong remains committed to bolstering the risk management sector, including captives as part of China’s 14th Five-Year Plan, according to the region’s government head.

Carrie Lam Cheng Yuet-ngor, chief executive of the Hong Kong Special Administrative Region of the People’s Republic of China, delivered opening remarks at the 15th Asian Financial Forum, hosted by the government and Hong Kong Trade Development Council and held online on Monday and Tuesday this week. Other speakers included Mark Carney, former Bank of England head and now UN special envoy on climate action and finance, and Jean-Claude Trichet, European Central Bank president.

“Hong kong’s financial system is characterised by our sound regulatory and risk management regime. It is also underpinned by the principle of one country two systems, and, with it, institutional strengths such as the rule of law, an independent judiciary, highly open and internationalised markets, a deep liquidity pool and the free flow of people information and capital,” she said.

Looking beyond the pandemic, Lam saw “boundless possibilities” to consolidate existing advantages and seek out fresh opportunities, she added.

“First and foremost is the strong support of the central government in consolidating and strengthening Hong kong’s role as an international financial centre particularly in aspects of asset management risk management and offshore renminbi business.”

That included bolstering the region’s status as an international risk management centre, she said. Over the past year, the administration had introduced profits tax concessions for select insurance businesses and expanded the scope of insurable risk for captives based in Hong Kong, she noted.

“We have also established a dedicated regulatory regime for insurance linked securities and launched a subsidy scheme for their issuance in Hong Kong,” Lam said. The changes had enabled the first issuance of an insurance linked security in October 2021, promoting Hong kong’s emergence as an ILS centre.

“There’s more good news for the insurance industry,” she added. “We are working to enhance mutual access of the insurance market in the Greater Bay Area, establishing after-sales service centres in the Greater Bay Area cities.

“The goal is to provide Hong Kong insurance policyholders in the Greater Bay Area with comprehensive support from enquiries to claims and of course policy renewal.”