News Regional19 Dec 2018

Hong Kong:Territory presents Beijing its New Year insurance wishlist

| 19 Dec 2018

Concerned over Hong Kong losing out to other international insurance centres, Hong Kong's Financial Services Development Council (FSDC) has called for a "Life Insurance Connect" with mainland China to widen insurance distribution within the mainland and capture the opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the Belt & Road Initiative.

The FSDC has released a report entitled "Enhancing Hong Kong's Role as a Leading Life Insurance Centre", which highlights closer insurance linkages with mainland China. The report also says that other ‘special/preferred treatment’ with regard to accessing the mainland market would also boost Hong Kong's appeal, e.g. an accelerated pathway to 100% ownership nationwide for appropriately qualified life insurance operations, as opposed to Beijing's recently announced three-year timeline for all foreign insurers.

The report said, “Firmly establishing a core role and differentiated position delivering distinctive value for the success of GBA is a strategic imperative for Hong Kong’s sustained growth and prosperous future, and being a widely recognised centre of excellence in life insurance is a route to achieving that.”

The report recommends six other key action points for enhancing the life insurance industry in Hong Kong:

  • implementing "fit for purpose" economic capital requirements;
  • encouraging the issuance of long-term assets appropriate for matching long-term liabilities;
  • extending the international tax treaty network and providing tax incentives to insurance groups that establish and maintain regional headquarters in Hong Kong;
  • creating a shared value environment where people live healthier for longer by providing better health care and financial support in retirement;
  • facilitating the local development and deployment of insurtech; and
  • attracting and developing insurance talent.

FSDC chairman, Mr Laurence Li, said, "In light of the changing demographics in Hong Kong, there is a strong business case to be made for enhancement of the life insurance industry. Hong Kong must strive to be the regional hub for multinational and mainland life insurance companies so as to maintain and enhance its competitive advantages."


 

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