At the Belt and Road Summit on Sept. 11, Hong Kong’s Insurance Authority (IA) highlighted the expanding role of captive insurance in supporting Belt and Road Initiative (BRI) projects, particularly those focused on energy transition.
The session explored how Hong Kong’s insurance industry could provide essential risk management services to these large-scale projects.
Moderated by MM Lee, executive director of the IA's general business division, the panel featured senior executives from a global brokerage, a local captive insurer, and a reinsurer.
The panellists discussed the growing use of captive insurance to address risks tied to overseas energy ventures, including new opportunities and challenges related to low-carbon energy projects.
The conversation also covered fast-growing sectors like electric vehicles, which align with the sustainability goals of the Belt and Road.
Lee noted that Mainland enterprises are increasingly adopting captives to manage their global risks more effectively.
“The use of captives by Mainland enterprises to holistically monitor their overseas project risks and scale up their intra-group risk management capacity is gaining prominence,” he said.
However, as a global risk management hub, Hong Kong is also well-positioned to offer comprehensive services to captive insurers.
“We stand ready to be the preferred captive domicile for state-owned and private corporations in the Mainland which are expanding their global footprint or shepherding projects in the Belt and Road countries,” Lee said.
In addition to this, the panel delved into how Hong Kong can cultivate a more robust risk management ecosystem, the strategic benefits for companies that set up captives in the city, and how the local insurance sector could meet rising demand for reinsurance capacity as energy transition projects grow.
In a separate but related move, Hong Kong and Shanghai signed an agreement aimed at enhancing collaboration in captive insurance and financial markets. This initiative is part of broader efforts to strengthen financial ties between the two cities.
A statement from the Chinese government outlined the scope of this partnership, focusing on risk management for BRI projects, expanding captive insurance operations, and promoting insurance-linked securities.
During discussions, officials addressed topics such as the latest developments in the China (Shanghai) Pilot Free Trade Zone, cross-border Renminbi business, and joint green finance efforts.
The agreement also seeks to advance market access programs like the Shanghai-Hong Kong Stock Connect and Bond Connect, while exploring new areas for cooperation in financial technology and product innovation. Both cities aim to deepen their collaboration, particularly in green finance and sustainable investment.
To ensure the goals of the agreement are met, regular meetings will be held between Hong Kong’s Financial Services and the Treasury Bureau and Shanghai’s office responsible for international financial centre development. These meetings will focus on advancing financial cooperation and aligning strategic objectives between the two cities.
