The Asian Actuarial Conference 2024 was held in Hong Kong towards the end of October with the theme ‘Exploring the future of insurance and beyond: Innovation, international hubs and Hong Kong’. Panels and presentations brought to life many of the big issues that actuaries and insurers alike have been grappling with this year. We were there to report on the highlights.
Hong Kong continued to present its face as a leading hub for (re)insurance in the Asia-Pacific region by hosting the Asian Actuarial Conference 2024 (AAC 2024) that drew over 1,000 delegates from 32 regions hot on the heels of the East Asia Insurance Congress the month before.
The opening session saw Actuarial Society of Hong Kong (ASHK) president Timothy Wong give a very bullish welcome. “Hong Kong is back,” he said, and indicated that AAC 2024 was half as big again as the last in-person meeting pre-COVID. “This is the first event since the pandemic, and we are proud to be hosts. We have come back stronger than ever, with over 1,000 delegates, 50% more than 2018 and with more speakers and more sponsors.”
He touched on the themes of AAC 2024 as being AI, ESG, talent, investment, the protection gap and the Greater Bay Area (GBA). “The GBA is a market that is ripe for exploration,” he said.
Growth and change
Hong Kong SAR under secretary for financial services and the treasury Joseph Chan continued the dramatic theme, stating, “We are at the intersection of profound change.”
He went on to talk about the three pillars underpinning insurance growth as being innovation, international hubs and Hong Kong.
On the subject of innovation he said, “Technology is revolutionising processes, but it is the expertise of actuaries that make it possible to implement it.”
Mr Chan went on to deal with the supporting regulatory environment – including regulatory sandboxes that allow for safe testing and pointed to the four licensed digital insurers currently operating in Hong Kong.
With the addition of the InsurTech sandbox, “The result is a more agile, customer-centric insurance sector to serve the public,” he said.
“Innovation is not just about technology,” he said. “It is also about developing new products,” like cyber and climate-risk insurance. “Actuaries are at the forefront of understanding the risks posed,” he said.
In the area if insurance-linked securities (ILS) and CAT bonds, “Hong Kong is a pioneer,” he said, “and has emerged as a hub for CAT bonds in Asia Pacific.”
“Actuaries are the bridge between technology and risk,” he said.
He ended by pointing to the deep pool of actuarial talent that Hong Kong has as well as its “vibrant economy and world-class infrastructure. Hong Kong boasts a rich ecosystem for actuarial talent development,” he said. “Hong Kong is not just a participant, it is a leader in defining the future of insurance in Asia Pacific,” he said.
International hub
Insurance Authority (IA) chairman Stephen Yiu gave an address which acknowledged that this was the second time that Hong Kong had played host to the AAC and indicated that the territory is an international hub for finance, insurance and training.
He said that Hong Kong was the sixth-largest insurance market in Asia and the 16th largest globally. He said he was, “proud of the work that actuaries in Hong Kong do to earn the territory this position.”
“After years of preparation, the risk-based capital (RBC) regime has been up and running since July. It took a decade to make this happen,” he said. “The smooth implementation is the result of unfailing support of actuaries to make it happen. But we cannot become complacent. We will kick-start a review next year – and ask for your support,” he said.
“The IA has left no stone unturned in promoting ILS. In the coming year we hope to strengthen Hong Kong’s position further as an ILS hub,” Mr Yiu said.
Mr Yiu pointed to a second megatrend affecting the insurance sector as being the ageing population. “This poses a tremendous challenge,” he said. “IA is working with the government to develop a new tax-deductible annuity product to help deal with longevity risk.”
The third megatrend is AI, said Mr Yiu and advised insurers to beware of cyber risk and the responsible use of AI. He also suggested that actuaries will play a central role in helping to build public trust in AI. “Collaboration between actuaries and regulators will ensure sustainability,” he said.
Hong Kong potential
Swiss Re head life and health re Asia Pacific ex China managing director Daisy Ning began her address by saying, “Hong Kong presents enormous opportunities. The market has shown a real rebound.”
The most significant element in the rebound for the insurance sector has been the easing of travel restrictions with the mainland – followed by the widening interest rate gap between Hong Kong and the mainland. “This means that Hong Kong insurers can offer more attractive products,” she said.
While Ms Ning acknowledged that there are some structural challenges, “We expect growth to continue in 2024 and 2025,” she said.
The three themes that sum up the prospects for the Hong Kong insurance sector are future, innovation and international, she said. “AI and Gen AI are enabling insurers to offer more innovative products,” she said.
Regional CEOs
The conference continued with a panel on insights from regional CEOs moderated by ASHK council member and Blackstone senior adviser Mark Saunders. The panel comprised Allianz regional CEO, Asia Pacific Anusha Thavarajah, AIA Group regional chief executive and group chief distribution officer Jacky Chan and Prudential managing director, strategic business group Lilian Ng.
The first question the panel addressed was whether an actuary should job-hop to advance their career – or stay with one employer for a long time. Mr Chan said, “Even within a single company, an actuary can get a vast amount of experience.”
Ms Thavarajah said, “I only move jobs for two reasons: One is family. It’s a global job and you’re in demand everywhere. The second reason is if there is a chance to grow and develop as a person. It’s all about how you continue to make a difference.”
The panel were asked to identify the three things they would look for in hiring their successor. Ms Thavarajah identified EQ, not being afraid to make a difference and they need to be ‘in flow’ with the job.
Ms Ng identified leaders who build leaders, not followers. They must have a belief in insurance – and a sense of humour or lightness.
Mr Chan said they must be passionate about the industry, must have a transformative mindset and possessing courage and boldness.
AI
What does AI mean for actuaries and insurance?
Ms Thavarajah said, “I don’t believe robots will replace actuaries. Actuaries should be excited by the arrival of AI. It allows actuaries to focus on the good bit.”
Ms Ng concurred. “Apply your human to using AI,” she said. Mr Chan was realistic. “AI can replace some jobs,” he said, “but many jobs it cannot replace.”
Actuaries will also have a central role in promoting sustainability.
“Actuaries can play a role in providing information and insight. We need to move into policymaking and not simply focus on insurance,” she said.
Mr Chan said, “Actuaries are becoming more and more important in developing policy and regulation.”
The Asian Actuarial Conference 2024 with the theme ‘Exploring the future of insurance and beyond: Innovation, international hubs and Hong Kong’ was hosted by the Actuarial Society of Hong Kong and held from 22-25 October 2024 at the Ocean Park Marriott Hotel, Hong Kong. Asia Insurance Review was the official media partner for the event. A