While Hong Kong remains one of the most open and dynamic insurance hubs of the world as evident by the high penetration rate, emerging risks from climate change, economic uncertainties and new technology are presenting as much challenges as opportunities to practitioners, said acting financial secretary Michael Wong Wai-lun.

The government has introduced a number of policies and infrastructure to help the sector tackle these headwinds, as it remains committed to working with the industry to bolster the sector’s resiliency, Wong said.

Wong was speaking at the inauguration ceremony of the East Asian Insurance Congress 2024 in Hong Kong. The 30^th edition of the biennial conference, and the third to be held the city, has attracted over 1,000 delegates from 31 countries who will be participating in the four-day conference that will run until September 27. It is the first in-person EAIC conference since the Covid-19 pandemic.

With the highest insurance penetration rate in the world at 70.2%, the city has attracted a diverse pool of insurers, said Wong.

“While Hong Kong remains the world’s most open and dynamic insurance sectors, we must also be prepared for challenges ahead, given fast evolving landscape of risk, opportunities, and technology,” he said.

To address the challenge from climate change, the Hong Kong government has been proactively introducing policy incentives to promote the city as a hub for insurance-linked securities (ILS), such as cat bonds.

To entice issuers, an ILS grant scheme was introduced in the city’s 2021-22 financial budget, he said. The scheme covers up to 100% of the upfront issuance costs and is subject to a cap of HK$12 million. That scheme has been extended until May 2025. The regulatory regime for ILS has also been streamlined.

The sector is also challenged by economic uncertainty, he said, adding “there is a need for insurers to better handle risks and as resilient as possible”.

Since July this year Hong Kong has implemented the new risk-based capital (RBC) regime, which provides a more risk-sensitive assessment for capital adequacy.

“This risk-based regime would strengthen resilience of the sector, and help the industry to effectively enhance the protection for policyholders,” he said.

Tech innovation such as artificial intelligence and digital platforms are drastically changing the way that insurers perform their underwriting, process claims, and deliver their services, he said.

With insurtech, many insurers are proactively seeking to collaborate with fintech firms to develop new products and tools to serve the needs of different parts of the insurance value chain.

“Insurtech will have a bright future. The government is committed to facilitating further development [on this front],” he said, noting the over 1,000 fintech companies and start-ups in the city, some of which specialise in insurtech.

The post Policy support and RBC to help insurers tackle emerging challenges: Michael Wong appeared first on InsuranceAsia News.

The post Leadenhall and Bennelong launch cat bond fund for Australia and New Zealand appeared first on InsuranceAsia News.

The post Australia’s Colonial First State seeks to add cat bonds to pension portfolio: report appeared first on InsuranceAsia News.

The post Howden Re sets out long-term Japan plan, in no hurry for results: Kentaro Tada appeared first on InsuranceAsia News.

The post Pricing and capacity ease at 1.7 renewal as underwriting scrutiny persists: brokers appeared first on InsuranceAsia News.

The post New Zealand EQC secures record US$5.7bn reinsurance cover appeared first on InsuranceAsia News.

The post World Bank debuts US$150m Jamaica hurricane cat bond in Hong Kong appeared first on InsuranceAsia News.

The post MS&AD completes US$200m dual-tranche Singapore cat bond for Japan nat cats appeared first on InsuranceAsia News.

The post Hong Kong reiterates pledge to develop as ILS hub in 2024-25 budget appeared first on InsuranceAsia News.

The post MS Amlin completes Singapore’s first-ever ILS renewal with US$35m Phoenix 2 Re appeared first on InsuranceAsia News.