Hong Kong must up its game to compete as insurance hub, says HKFI
Hong Kong must up its game to compete as insurance hub, says HKFI | Insurance Business Asia
Insurance News
Hong Kong must up its game to compete as insurance hub, says HKFI
Industry body proposes incentives to attract global insurers to set up regional headquarters in Hong Kong
Insurance News
By
Miko Pagaduan
Hong Kong Federation of Insurers (HKFI) has called for more incentives for international insurers to establish their regional headquarters in the city to compete with Singapore and Bermuda.
Major insurers like Munich Re, Swiss Re, and Allianz have their regional headquarters in Singapore, which offers special tax treatments and incentives for insurers to move their offices there.
According to the Global Insurance Market Report by the International Association of Insurance Supervisors (IAIS), Hong Kong ranked 16th last year with a 1.2% market share of global insurance premiums. In contrast, South Korea ranked 10th with a 2.4% share. Singapore was not listed in this report.
“Hong Kong has no right to win any of this business,” said Edward Moncreiffe, chairman of a think tank set up under HKFI. “You have to compete with other markets for talent and for capability, and to do that you have to provide incentives.”
The think tank has presented a range of proposals to attract more international insurance companies to Hong Kong. Moncreiffe has been working with a team of more than 13 veteran insurance executives to achieve this target, set by Chief Executive John Lee Ka-Chiu in December.
In terms of reinsurance, Hong Kong ranked 12th with a 1.4% global market share, behind Singapore in sevent place with a 2.6% share, according to IAIS data.
The city also lost out to Bermuda as a market for setting up insurance companies. Twelve large insurers in Hong Kong, such as AIA, AXA, and FWD, were all incorporated in Bermuda for tax purposes.
However, they might consider redomiciling in Hong Kong to avoid facing two regulatory regimes in Hong Kong and Bermuda.
The HKFI also wants mainland Chinese authorities to allow Chinese investors to buy investment-linked insurance policies through the Wealth Management Connect scheme, and to expand Hong Kong medical insurance coverage in the Greater Bay Area.
Additionally, the federation would like to see more insurance talent training in Hong Kong, as well as the lowering of capital requirements and costs for mainland and other overseas companies setting up captive insurance companies in Hong Kong.
“We would like to see a fast-track legal mechanism, and secure Bermuda concurrence for international insurers redomiciling in Hong Kong,” Moncreiffe said.
The Hong Kong government is currently collecting views until next month on allowing overseas firms to change their place of incorporation to Hong Kong without the need to wind up or get court approval first.
Moncreiffe said he hoped the insurance sector would be the first industry to use such a system.
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