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In this June 2023 edition of Regulatory Insurance Update, the Hong Kong Corporate and Commercial Team provide the latest updates relating to the law and regulations, developments, and news in the insurance industry in Hong Kong.
Insurance industry news and developments
Date: 27 June 2023
On 26 June 2023 the International Sustainability Standards Board (“ISSB”) issued the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards, including IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information[1] and IFRS S2 Climate-related Disclosures[2]. This follows the recommendations of the Financial Stability Board’s Taskforce on Climate-related Financial Disclosure.
The release has been welcomed by the Green and Sustainable Finance Cross-Agency Steering Group as an opportunity to enhance the availability of transparent, comparable and reliable sustainability information important for financial intermediaries and global investors to fulfil their obligations to stakeholders on carbon emissions reduction and regulators’ requirements, and to align Hong Kong’s corporate sustainability-related disclosures with the global baseline.
[1] IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term.
[2] IFRS S2 sets out specific climate-related disclosures and is designed to be used with IFS1.
Date: 23 June 2023
The Hong Kong Export Credit Insurance Corporation (“HKECIC”) has launched a pilot scheme in collaboration with five banks, namely the Bank of China (Hong Kong), Bank of East Asia, DBS Bank (Hong Kong), Hang Seng Bank and the Hong Kong and Shanghai Banking Corporation (“Banks”), to develop a “risk-sharing arrangement on domestic sales” in Mainland China (“Scheme”).
Under the Scheme, the Banks will share with HKECIC their credit assessment results on Mainland buyers after they are approached by an exporter for credit insurance or export loans. Both parties will share the risk of non-payment by the buyer with a credit limit capped at HK$100 million for each buyer. The total credit ceiling of the Scheme is HK$10 billion which will be reviewed by HKECIC in 12 months’ time.
HKECIC commissioner Terence Chiu Man-chung noted the varying levels of disclosure of credit and financial information for private enterprises in the Mainland make risk assessment difficult and commented that the Scheme will offer greater protection to Hong Kong exporters.
Date: 23 June 2023
S&P Global Ratings, an American credit rating agency, has predicted that Hong Kong’s life insurance market will improve over the next two years. One of the key drivers for this is anticipated to be sales to visitors from the Mainland due to the resumption of cross-border travel in February 2023. This has already led to a significant increase in the average case size of new life policies for Mainland customers. Hong Kong’s new business growth for the life segment is predicted to increase 20% to 25% by year-end before slowing down to 10% to 15% in 2024.
Smaller gains are expected for the property and casualty market in Hong Kong, mainly driven by the resumption of economic activities which has led to an increase in demand for accident and health insurance policies.
Hong Kong’s new business growth for the life segment is predicted to increase 20% to 25% by year-end before slowing down to 10% to 15% in 2024.
Insurance and reinsurance
Hong Kong