"The next wave of economic growth will be powered by Asia," said Insurance Authority, Hong Kong CEO Clement Cheung. "Many Asian economies are still uninsured and there is plenty of room to lower the protection gap," he said in his regulatory keynote address at the FT Insurance Summit held in Hong Kong yesterday.
Specific steps taken by the authorities in Hong Kong to relieve the burden on society of a rapidly ageing population include tax deductions to help people plan early for their healthcare needs.
Mr Cheung added that Hong Kong is looking at, “Introducing in an RBC scheme to bring the territory into line with international standards.” This will help insurers with their asset liability models, he said, and indicated that the authorities in Hong Kong “started planning for this almost a decade ago.”
The long planning phase has allowed Hong Kong to watch and see how other jurisdictions have tackled the problems thrown up in by introducing new RBC regimes and so Hong Kong is now much better informed. “It will also put Hong Kong in a better position to negotiate with the Chinese regulator,” Mr Cheung said, and this could only lead to better prospects for Hong Kong’s insurance sector.
All of this means one thing, he said, “We are now more capable of fulfilling the role as the designated risk-management centre of the region.”
The effects of technology on the insurance business of the region could not be overestimated, Mr Cheung said. “This is an unstoppable force,” he said and noted that the Hong Kong Monetary Authority last month introduced a fast payment system which could ease the speedy introduction of InsurTech in Hong Kong.
Mr Cheung pointed to the “tremendous potential of InsurTech,” bearing in mind the proportion of life premiums that are written via digital channels. Last September Hong Kong introduced both a sandbox and a fast-track to help facilitate more InsurTech in the territory – both of which “met with a warm reception,” he said.
“Given a clear vision and a regulatory steer, InsurTech can lead to a lesser burden on society – and this is why insurance exists,” Mr Cheung said. “Everyone could come out a winner.”
Asia Insurance Review was a media partner of the FT Insurance Summit held yesterday in Hong Kong.