HKSAR gov't should further support reinsurance business: expert

The Hong Kong Special Administrative Region (HKSAR) government needs to take more measures to support the development of reinsurance business in Hong Kong, an expert said Thursday.

As a major Asian insurance center, Hong Kong is facing challenges from other competitors in the region, mainly in the areas of reinsurance, marine insurance and captives, Winnie Wong, member of the Financial Services Development Council (FSDC), told a press conference.

She said the reinsurance industry has huge potentials of growth and the HKSAR government should provide more supporting measures, such as tax incentives, talent development or preferential rental prices.

Wong also said that following the implementation of China Risk Oriented Solvency System (C-ROSS) in January 2016, reinsurance placement has started to be diverted to on-shore reinsurance companies on the Chinese mainland.

For example, insurers and brokers are diverting reinsurance businesses away from Hong Kong to Shanghai or Singapore to enjoy economics of scale and tax benefits offered by these hubs, Wong said.

Hong Kong is currently grouped "offshore" under C-ROSS and the HKSAR government is suggested to sign an agreement with the China Insurance Regulatory Commission to apply a "SAR" status under the scheme, Wong said.

Through the "SAR" status, some preferential treatments can be extended to Hong Kong so that Hong Kong can develop the reinsurance business together with the Chinese mainland, while mainland companies can also enjoy the comprehensive insurance products and risk transfer solutions offered by Hong Kong insurers.

Founded in 2013 by the HKSAR government, the FSDC is a high-level cross-sectoral advisory body to help develop Hong Kong's financial services industry.