Hong Kong wants extra underwriters in marine insurance coverage

The town might need to ease immigration guidelines to draw expertise.

Hong Kong ought to develop and develop its pool of underwriters, whether it is to develop into a global hub for marine insurance coverage and associated companies, in accordance with analysts.

Overseas underwriters often take cost of main dangers within the metropolis’s marine trade given the shortage of native expertise and assets, mentioned Priscilla Foohead of Marine and Power for the Asia Pacific area at Swiss Re.

The federal government might have to chill out immigration insurance policies and supply extra tax incentives to draw extra expertise and international marine insurers, she mentioned, including that the town wants to supply sturdy insurance coverage and reinsurance providers, together with marine insurance coverage, to take care of its standing as an ocean hub. .

Hong Kong has 81 insurers offering marine insurance coverage, though solely 10 specialise in marine insurance coverage, in accordance with the Insurance coverage Authority.

The marine insurance coverage sector is significant to the transport trade as a result of insurance coverage brokers helping ship patrons determine dangers and tailor appropriate insurance coverage protection, in accordance with the Hong Kong Commerce Growth Council.

Timothy Lee, deputy chairman of the Marine Insurance Coverage Affiliation (MIA), mentioned Hong Kong may mirror London, one of many of the world’s largest and main marine insurance coverage centres. Though there isn’t any official knowledge on the variety of insurance coverage underwriters in London, the town is home to Lloyd’s of London, which serves purchasers in more than 200 international locations and areas.

“Lloyd’s of London is (certainly) one of the most important and main markets for marine insurance coverage as a result of they’ve got one of the many largest expertise swimming pools,” he advised Hong Kong Enterprise. “They’ve got good underwriters; not solely good; they’ve got popularity and are acknowledged as lead underwriters.”

“We additionally have to have extra ‘Michelin Star’ rated underwriters in Hong Kong, which isn’t simple,” he added.

In his 2024 policy address, Hong Kong Chief Govt. John Lee has unveiled plans to spice up marine insurance coverage expertise and develop the maritime and aviation coaching fund to incorporate inexperienced power programs and marine insurance coverage exams.

MIA Chairman Patrick Wong mentioned their group has developed a marine insurance coverage coaching program acknowledged by the Worldwide Union of Marine Insurance Coverage (IUMI) as a part of efforts to deal with the expertise scarcity.

The Hong Kong Federation of Insurers (HKFI), beneath which the MIA operates, represents the “IUMI Asia Hub,” the primary and solely abroad department of IUMI. Wong mentioned the MIA can be utilizing its hyperlinks with IUMI to advertise Hong Kong’s marine insurance coverage merchandise to different international locations.

Lee mentioned Hong Kong provides funding and sponsorship applications, such as through the Maritime and Aviation Coaching Fund (MATF). Other than marine insurance coverage, the fund additionally covers transport, maritime legislation, and different maritime-associated industries and providers.

Folks finding out in Hong Kong can apply for an 80% refund for the price of their online training permitted beneath the fund, he added.

‘State of the Market’

Lee mentioned that extra dependable and successful underwriters in Hong Kong may spur international marine insurers to inject extra capital into the town. “If we’ve got good folks right here, along with the enterprise alternatives… the businesses will make investments extra.”

Wong famous that other than tax incentives—the federal government has halved marine insurers’ and brokers’ revenue tax to 8.25% in 2021—Hong Kong is utilizing its relationship with China, notably within the Higher Bay Space, to draw extra insurance coverage gamers and increase its trade to develop. attain.

Hong Kong’s geographical proximity to mainland China reinforces its function as a necessary maritime hub within the area, says James Lo, a senior underwriter at HDI International SE Hong Kong. “The trade typically discusses leveraging Hong Kong’s proximity to the mainland China market to supply extra high-value-added providers for the maritime trade.”

He added that the town may broaden its insurance coverage portfolio by providing cyber threat protection for maritime operations, inexperienced ship insurance coverage, and parametric insurance coverage for weather-related dangers. There may be additionally a rising curiosity in synthetic intelligence (AI)-driven options for autonomous transport.

In Hong Kong, the three important marine insurance coverage product traces are cargo, hull and equipment, and legal responsibility, together with Safety and Indemnity (P&I), with the ship-related portion accounting for many insurance coverage premiums, in accordance with Lee.

Foo mentioned Hong Kong already provides complete marine insurance coverage services, noting that the market caters for cargo and hull, together with yachts and ancillary merchandise, safety and indemnity, and to a lesser extent, upstream power and renewable power.

“All of this stuff will be offered by the market, some greater than others by way of capabilities and specialties—a state of the market that may solely be anticipated from a globalized trade like marine,” she mentioned. “Areas of interest and extra-specialized marine merchandise are nonetheless primarily dealt with within the London and Norwegian markets, which ought to stay so.”