Hong Kong: Govt urged to do more to keep reinsurers in the city
Source: Asia Insurance Review | Nov 2016
Mr Chan Kin-por, who represents Hong Kong’s insurance sector in the Legislative Council, has said that Munich Re’s restructuring of its Asic Pacific P&C business shows that the Hong Kong government needs to do more to lure international reinsurers to stay in the territory.
Mr Chan, who is also an advisor at Munich Re, said that the government needs to cut compliance costs and make it easier for companies to operate in both Hong Kong and mainland China, reported the South China Morning Post.
In September, the world’s largest reinsurer said that among several changes, its Beijing office will be expanded. Referring to the Greater China region, Munich Re said in a statement: “In future, Chinese clients will primarily be managed out of Beijing, while the Hong Kong presence will be greatly reduced and the Shanghai property-casualty office closed. The Taipei Liaison Office will remain.”
Munich Re’s mainland China reinsurance premiums stood at EUR1.4 billion euro (US$1.5 billion) last year, representing about 5% of its global reinsurance business. In comparison, the reinsurer generated premiums of HK$294 million (US$38 million) in 2014, according to latest data available from the Office of Commissioner of Insurance of Hong Kong.
Mr Chan conceded: “Hong Kong still has a lot of advantages for international insurance companies to operate, but the business volume here will never be able to match the mainland’s.” He added that Hong Kong still remains an attractive market for life insurance companies as many mainlanders like to buy their products in the territory, because of the wide range of choices available.