At the Belt and Road Summit on September 11, Hong Kong’s Insurance Authority (IA) emphasized the growing importance of captive insurance in facilitating Belt and Road Initiative (BRI) projects, particularly those related to energy transition.
The session focused on how Hong Kong’s insurance sector can provide crucial risk management services for these large-scale projects. MM Lee, the executive director of the IA’s general business division, moderated the panel, which included senior executives from a global brokerage, a local captive insurer, and a reinsurer.
Captive Insurance in Energy Ventures
Panelists discussed the increasing adoption of captive insurance to manage risks associated with overseas energy projects.
They highlighted both new opportunities and challenges that arise with low-carbon energy initiatives. The discussion also touched on rapidly growing sectors such as electric vehicles, which align with the sustainability objectives of the Belt and Road.
Lee pointed out that companies from Mainland China are increasingly turning to captives to better manage global risks. He stated, “The use of captives by Mainland enterprises to holistically monitor their overseas project risks and enhance their intra-group risk management capacity is gaining prominence.”
Hong Kong is positioned as a global risk management hub, ready to provide comprehensive services to captive insurers. Lee remarked, “We stand ready to be the preferred captive domicile for state-owned and private corporations in the Mainland that are expanding their global presence or managing projects in Belt and Road countries.”
The panel also explored ways for Hong Kong to strengthen its risk management ecosystem, the strategic advantages for companies establishing captives in the city, and how the local insurance sector can meet the increasing demand for reinsurance capacity as energy transition projects expand.
Agreement Between Hong Kong And Shanghai
In a related development, Hong Kong and Shanghai signed an agreement aimed at enhancing cooperation in captive insurance and financial markets. This initiative is part of broader efforts to strengthen financial ties between the two cities.
The Chinese government released a statement detailing the partnership’s focus on risk management for BRI projects, the expansion of captive insurance operations, and the promotion of insurance-linked securities.
During discussions, officials addressed various topics, including updates on the China (Shanghai) Pilot Free Trade Zone, cross-border Renminbi business, and joint green finance initiatives.
The agreement also aims to improve market access programs, such as the Shanghai-Hong Kong Stock Connect and Bond Connect, while exploring new opportunities in financial technology and product innovation. Both cities intend to deepen their collaboration, particularly in green finance and sustainable investment.
To ensure the agreement’s objectives are achieved, regular meetings will be held between Hong Kong’s Financial Services and the Treasury Bureau and Shanghai’s office responsible for international financial center development. These meetings will focus on enhancing financial cooperation and aligning strategic goals between the two cities.
