Hong Kong reacts as it loses insurance business to Singapore
Hong Kong is losing insurance business to Singapore, but the local authorities are implementing an action plan to strengthen its position as Asia’s insurance hub.
A robust expansion of the economies in the region, helped by higher government infrastructure spending is expected to boost insurance demand and spur reinsurance activity in the region.
But Hong Kong’s Financial Services Development Council (FSDC) has warned that the jurisdiction is being impacted by competition from its Asian competitors in many areas, especially in reinsurance, marine insurance and captives. Hong Kong has experienced departures and downsizing of the Hong Kong offices of various international insurance and reinsurance companies.
Now Hong Kong is reacting. It is trying to make the jurisdiction more attractive to the insurance industry. The city is, for example, establishing an independent insurance authority which is tasked to modernise the regulatory framework of the industry and make it in par with other sophisticated markets, the Hong Kong Federation of Insurers (HKFI) told Intelligent Insurer in an emailed response to a comment request.
In addition, the government in Hong Kong is developing a policyholder’s protection scheme aiming to maintain market stability and better protect policyholders’ interest by providing a safety net in the event of insolvency of an insurer.
The jurisdiction is also investing in its fraud detection capabilities, building a centralised claims database to detect and prevent fraud by applying “state-of-the-art” algorithm and machine learning technology. The aim is to “plug the loopholes and improve our underwriting performance while maintaining a reasonable level of premium”.
This news story is a snapshot of a longer report on Intelligent Insurer. If you want to know more what Hong Kong is doing to attract insurance business and what Singapore is focusing on, please click here.
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