HK on Way to Build Itself Into World Insurance Center

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Last updated at: (Beijing Time) Sunday, March 17, 2002

HK on Way to Build Itself Into World Insurance Center

Hong Kong, with its top talents and freest economy in the world, is bending on developing itself into another insurance niche, on a par with any well-known insurance centers worldwide.

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Hong Kong, with its top talents and freest economy in the world, is bending on developing itself into another insurance niche, on a par with any well-known insurance centers worldwide.

Hong Kong's insurance market has been developing every soundly, and the market is attracting more and more world insurers to run business here, Hong Kong's Commissioner of Insurance Benjamin Tang said Friday during a trip to Singapore.

Despite a worldwide economic slowdown, provisional statistics show that the total gross premiums of the Hong Kong insurance industry reached 85 billion HK dollars (10.8 billion U.S. dollars) and sustained a growth rate of 32 percent last year.

Statistics also indicated strong signs of recovery in the general business market, with gross premiums of approximately 19.5 billion HK dollars (2.5 billion U.S. dollars), increased by about 10 percent over 2000. The revenue premiums of long term business reached about 65.5 billion HK dollars (8.4 billion U.S. dollars) in 2001.

The remarkable growth was mainly attributable to the individual life business. In 2001, the number of individual life in-force policies reached 5 million, covering about 74 percent of Hong Kong 's population.

According to latest figures, there were a total of 202 authorized insurers operating in Hong Kong. Of them, 139 were general business insurers, 45 were long term business insurers and the remaining 18 were composite insurance players.

These insurers included 29 professional reinsurers and a few specialist insurers engaging in captive, mortgage, credit, marine, alternative risk transfer and title insurance business.

Hong Kong's insurance market has a strong international presence. Over half of the authorized insurers are incorporated outside Hong Kong in 25 different countries, with the U.S. companies taking the lead.

China's accession to the World Trade Organization opens up more opportunities for Hong Kong insurers since the mainland has a large insurance market and Hong Kong has many advantages as a gateway to the mainland, Tang said.

With the ever-increasing purchasing power of the Chinese citizens, China's total premium income grew to 211 billion RMB (25 billion U.S. dollars) for 2001, an increase of 32 percent over 2000.

To keep pace with the market development, foreign insurers and joint ventures are allowed to enter the Chinese insurance market. After joining the WTO, China is committed to further widening market access to foreign players, which enables Hong Kong a bigger role to play, Tang said.

Tang believed that Hong Kong is well poised to develop into an important insurance center having regard to its high standard of insurance supervision, well-developed telecommunications, rule of law and free flow of information.

Hong Kong's reputation is built on its proven track record, a clear vision of the direction of economic development, a multitude of infra-structural advantages, and two distinctive attributes: first, its is the world's freest economy, and second, it has a supportive regulatory authority, Tang said.

The SAR government is also making efforts to enhance Hong Kong' s competitive edges and facilitate the development of the insurance industry, said Tang.

Since the industry's development relies on talents, greater efforts are made to promote degree-insurance education, Tang said, noting that information technology will be adopted to ensure healthy development of the industry.

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