Insurance Authority launches platform to help insurers tap belt and road projects
- Platform will ‘promote exchange of intelligence, forge alliances and facilitate networking,’ Insurance Authority says
- Mainland Chinese, Hong Kong and foreign enterprises involved or related the insurance industry are encouraged to join
The Hong Kong Insurance Authority has launched a platform to help Hong Kong and international insurance companies capture business opportunities arising from “Belt and Road Initiative” projects, including coverage ranging from political risk to terrorism.
Moses Cheng Mo-chi, chairman of the Insurance Authority, unveiled the platform called Belt and Road Insurance Exchange Facilitation (BRIEF) at the authority’s first Asian Insurance Forum in Hong Kong on Tuesday.
“The BRIEF is a platform to provide information and offer other assistance to allow insurance companies to make deals with bankers, project managers and all those involved in the belt and road initiatives about all types of insurance risk for these infrastructure projects,” Cheng said. “We have 29 insurers signed up to the BRIEF. I hope more of you here join so that the aspiration of BRIEF can be turned into your opportunity.”
Belt and road initiatives, also known as the New Silk Road, is a Beijing-led project to encourage 65 countries from Asia, Europe, Africa, and the Middle East to build ports, railways, roads, power plants and other infrastructure to promote economic growth and trade.
“The insurance demand for these belt and road projects are huge. We would like the new platform to attract more insurers to use Hong Kong as a hub to arrange these giant infrastructure insurance deals,” Cheng said.
He added that about 200 Insurance Authority staff would help to arrange activities on the platform.
The BRIEF is the first major project launched by the Insurance Authority since it was established in June last year.
Cheng said the industry generates income mainly from life and general insurance products, yet he hopes infrastructure-related insurance products will be the next major boost.
The local insurance industry has generated premium income worth HK$388.3 billion (US$49.69 billion) in the first nine months of this year.
The insurance platform reflects the latest effort by the Hong Kong government to drum up business related to belt and road projects. The Hong Kong Monetary Authority introduced the Infrastructure Financing Facilitation Office in 2016 to encourage banks and other international organisations to use Hong Kong as a fundraising hub for infrastructure projects. At the time the HKMA forecast that government spending on belt and road initiatives would amount to US$800 billion annually.
“Hong Kong traditionally has acted as a hub for international insurance companies to do business,” said Chan Pui-leung, chairman of the Hong Kong Federation of Insurers, who spoke at the forum. “The industry welcome the new platform launched by the Insurance Authority to facilitate belt and road projects.”
Peter Burnett, managing director and regional head of corporate finance of Greater China and North Asia at Standard Chartered Bank, said private insurance in Hong Kong would have a big role to play in project financing.
“As a banker, we care about risk management. The private insurance company can offer insurance coverage tailored to each country’s situation,” Burnett said at the forum.
“For example, in Pakistan, the biggest risks for infrastructure projects are terrorist attacks, which can be better addressed by private insurance companies and not state-owned credit agencies,” Burnett said.
Meanwhile, the Insurance Authority has initially approved the first online life insurance company via the fast track approval process, according to Carol Hui Mei-ying, executive director of the Insurance Authority.
She declined to identify the company, saying a formal announcement will be made in two weeks.
The authority in October 2017 introduced a fast track process to accept applications for online insurers.
“Online insurance companies can offer more choices for customers” she said. “Hong Kong is more advanced than other markets in the region in digital insurance.”