By Roxanne Libatique
The Insurance Authority (IA) of Hong Kong has voiced support for the policy initiatives outlined in the 2025 Policy Address, delivered by the Chief Executive on Sept. 17.
The IA underscored the importance of insurance in reinforcing Hong Kong’s status as a global financial centre – with particular attention to the growth of captive insurance and reinsurance activities.
Stephen Yiu, chairman of the IA, commented that insurance is instrumental in strengthening Hong Kong’s position as a global financial hub.
“Being in charge of both prudential supervision and market development, the IA has made relentless efforts to improve our competitiveness in captive and reinsurance business,” he said.
Captive insurance was a key focus during a recent breakout session at the Belt and Road Summit in Hong Kong.
The session gathered regulatory officials and industry leaders to discuss how captive insurance structures can help organisations manage the risks associated with large-scale infrastructure and investment projects.
The panel, moderated by MM Lee, executive director of the IA’s general business division, included representatives from a global brokerage, a local captive insurer, and a reinsurer.
The discussion addressed the increasing adoption of captive insurance for managing risks in overseas energy projects, including those related to low-carbon energy initiatives.
Emerging sectors such as electric vehicles were also discussed, with panellists noting their relevance to the sustainability objectives of the Belt and Road Initiative.
Lee observed that more Mainland Chinese companies are turning to captive insurance as a way to manage global risks.
“The use of captives by Mainland enterprises to holistically monitor their overseas project risks and scale up their intra-group risk management capacity is gaining prominence,” Lee said.
He added that Hong Kong is positioned to serve as a preferred domicile for captive insurers, especially for Mainland corporations expanding internationally or participating in Belt and Road projects.
“We stand ready to be the preferred captive domicile for state-owned and private corporations in the Mainland which are expanding their global footprint or shepherding projects in the Belt and Road countries,” Lee said.
The panel further examined how Hong Kong can build a stronger risk management ecosystem.
Topics included the strategic benefits for companies establishing captives in the city and the ability of the local insurance sector to meet rising demand for reinsurance, particularly as energy transition projects increase in scale.
Turning to the 2025 Policy Address, Yiu highlighted several new measures.
“The proposed setting up of a dedicated marine risk pool will open up new opportunities and bolster our resilience against contingencies,” he said. “Meanwhile, the IA is exploring with the industry effective ways to facilitate local residents in accessing medical treatment or elderly care in the Mainland and pursuing self-drive tours in the Greater Bay Area, as well as to support the low-altitude economy.”
He also noted that the IA has begun reviewing the design and risk calibration of the Risk-based Capital Regime, aiming to attract additional offshore reinsurance business and encourage insurers to participate in infrastructure financing.