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Jan 2023

No one said it was going to be easy

Source: Asia Insurance Review | Dec 2022

As most readers will know, last month saw the annual Asia Insurance Industry Awards take place in Singapore. The chance to get together for an in-person industry event was warmly welcomed by the many hundreds of people who came along for the spectacular evening.
 
Perhaps the most grateful guests of all were those from Hong Kong, who have undoubtedly had a much tougher pandemic than most other territories.
 
A number of them expressed concerns about the number of top-quality staff who were still leaving Hong Kong because of the stringent COVID-19 conditions that had applied to the territory for much of the past three years.
 
Of course, it’s not just about the pandemic. The cold snap that has descended on US-China relations because of Russia president Vladimir Putin’ invasion of Ukraine but also encompassing tensions over the formal position of Taiwan, human rights issues centring on the Uighur people and the ‘common prosperity’ drive within China all serve to create a muddy backdrop to businesses simply trying to get on with doing business.
 
The insurance sector in Hong Kong must dearly wish that it could simply get back to the way things were before – to a time when the territory was seen as a buzzing financial hub that was pushing the boundaries of InsurTech.
To add to the woes of the sector, the biggest life insurance player in the territory, HSBC Life must be watching its back simply because it is part of the HSBC Group.
 
The banking giant, for many years a potent symbol of everything that was great about Hong Kong, has found itself at odds with its biggest shareholder, which is calling for the HSBC Group to be broken up.
 
The irony of the situation is that the biggest shareholder in question is the Chinese insurance group Ping An. In recent weeks the chair of the insurer’s asset management arm told the Financial Times that the bank should be broken up and be “far more aggressive” in its cost cutting.
 
The stoush between Ping An and HSBC began properly back in 2020 when the UK regulator forbade banks regulated in the UK, including HSBC, from paying shareholder dividends because of the destabilising effect of the pandemic and the uncertain impact that this might have on the financial services sector. Because of this edict, Ping An lost out on dividend payments of around $1bn.
 
Such is the nature of the globalised world that the asset management arm of an insurer can affect the insurance arm of a bank in a significant and prolonged fashion.
 
We have tried, in this issue of Asia Insurance Review, to offer an overview of the worries, hopes and aspirations of the insurance sector’s leaders for the year ahead in 2023.
 
The usual concerns dominate, but perhaps one sentiment that has not been articulated very precisely is that today’s leaders simply have to get on with it.
 
No one knows what tomorrow might bring in terms of geopolitical eruptions, Nat CAT, inflation, stagflation, recession, rising interest rates, supply-chain problems, trade wars, cyber attacks, the possible collapse of the cryptocurrency house of cards and much more besides.
 
But today’s insurance and reinsurance leaders simply have to hope for the best and plan for the worst. No one said it was going to be easy. A 
 
Paul McNamara
Editorial director
Asia Insurance Review
 
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