Hong Kong: Reinsurance sector gains from Beijing policy
Source: Asia Insurance Review | Mar 2019
Hong Kong’s reinsurance industry grew quickly last year thanks to new regulations from Beijing granting reinsurers in the territory an edge over their international rivals.
The total gross premium of all reinsurers in Hong Kong rose by 9.1% to HK$10bn ($1.3bn) in the first nine months of last year, reported South China Morning Post citing official data.
Hong Kong-headquartred Peak Re saw its China related business soar by almost a third in 2018, according to co-founder and chief executive Franz-Josef Hahn.
“Our strong growth in the reinsurance business was due to the preferential treatment of certain Hong Kong-based reinsurers by the mainland insurance regulator last year,” he said in an interview.
The CBIRC agreed last July to give preferential treatment to Hong Kong based reinsurers including Peak Re, Transatlantic Re, Taiping Re, SCOR and others. Under this, a lower capital charge is applied to mainland insurers if they cede business to qualified reinsurers in Hong Kong.
Insurance Authority chief executive Clement Cheung said that Beijing’s policy provides support to mainland insurers in risk diversification, as the Hong Kong insurance market can help them handle difficult risks that need to be reinsured offshore. A