The Hong Kong Financial Services Department Council (FSDC) has predicted that Hong Kong will become a “world-class” captive insurance domicile by 2020, with five to 10 captive insurers licensed yearly, reaching a total of 50 by 2025.
A report released by the FSDC said that this is a feasible goal, given the number of organizations in mainland China and surrounding markets that possess the size, scale, risk profile, and relevant growth plans to utilise captives.
The report added: “Hong Kong is already the preferred offshore platform for many mainland companies (many of these companies are already listed on the Hong Kong stock exchange) and is seen as a gateway between mainland China and the rest of the world. Hong Kong already has a mature and sizeable insurance industry with scope for an influx of expertise in captive management if and when necessary.”
However, the FSDC said that Hong Kong has been slow to promote itself as a venue for captive insurers due to lack of regulatory promotion and lack of incentives to compete with other offshore domiciles, such as Singapore and Labuan, which are now established hubs.
The council asked the Independent Insurance Authority to take initiative to inform corporations in Hong Kong and the rest of the Greater China area about captive insurance companies and promote Hong Kong as a suitable destination.
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