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Over 3.1k virus cases identified

The Centre for Health Protection today said it is investigating 3,172 additional locally acquired COVID-19 cases, of which 449 were identified through nucleic acid tests and 2,723 via rapid antigen tests.   Separately, 111 imported cases were detected.   Furthermore, seven residential care homes for the elderly and five for disabled people logged 13 cases involving their residents.   The Hospital Authority reported that 20 patients passed away in public hospitals. According to a preliminary analysis, the cause of death for nine patients was related to COVID-19, while that of the remaining 11 patients was unrelated.   It also registered eight more critical cases, bringing the number of patients in critical condition to 93.   Separately, to align with the Government’s cancellation of issuing isolation orders from tomorrow, the authority will, starting from the same day, announce at 8.30am and 1pm the information of general out-patient clinics (GOPC) quota reserved for COVID-19

Insurance growth opportunities eyed

It is a time for us to reflect on what we have learned from the fight against the pandemic, and to take a better look at what's in the new normal - the resilience of our insurance market and the enormous growth opportunities we are going to embrace.   Let me begin with resilience. Our insurance sector grew at an average rate of 5.9% in the past five years from 2017 to 2021. We also ranked the first in terms of insurance penetration globally in 2020 - more than 20%. A total of 13 of the world's top 20 insurers conduct their businesses in Hong Kong and a total of 17 insurance companies are currently listed on the Hong Kong Exchanges & Clearing Limited, our stock exchange. By the end of 2021, their market value accounted for about 5.5% of the total market value of our stock market, with six of them being the world's top 20 insurers by market value. In view of the opportunities presented by our market and the Guangdong-Hong Kong-Macao Greater Bay Area, many international financial institutions, including insurance companies, banks and wealth management companies, will continue to expand their presence in Hong Kong.   The fifth wave of the COVID-19 epidemic indeed presented unprecedented challenges to all of us in the past few months, and all along the Government has been providing facilitative measures and regular guidance to the financial sector to ensure our operational resilience. I am pleased to see the rationalisation of travel restrictions announced earlier this month by the Chief Executive, including lifting the flight ban and early discharge of returning Hong Kong residents from designated quarantine hotels. The Government also announced last week that starting May 1, non-Hong Kong residents will be allowed to enter from overseas upon their compliance with some testing and quarantine requirements. Together with the suitable adjustment to the triggering thresholds for the route-specific flight suspension mechanism, those measures have received a warm welcome at home and abroad, of course including the business sector. As we bring the pandemic under control and gradually resume daily lives, opportunities are knocking on our doors and it is time for our economy and market to get prepared for a rebound.   Before looking into the future, let's review what has been done to further develop our insurance market. First of all, we have put in place a new regulatory framework for the issuance of insurance-linked securities (ILS) in Hong Kong in March last year, and shortly after we also launched a two-year pilot subsidy scheme to promote the development of Hong Kong as an ILS domicile. These efforts brought us encouraging results as the first ILS, which is in the form of a catastrophe bond offering protection against losses inflicted by typhoons in the Mainland, was then issued in Hong Kong in October last year.   Also, to provide financial incentives for new business development, half-rate profits tax concessions are provided to selected businesses, including marine and specialty insurance from March last year. They will enhance the competitiveness of our insurance industry in seizing new opportunities, including those arising from the Belt & Road Initiative (BRI).   At the same time, we have also expanded the scope of risks that could be underwritten by captive insurers formed in Hong Kong, in order to better meet the risk-management needs of multinationals, including Mainland enterprises that are seeking to go global. This allows Hong Kong to capture the opportunities presented by our country's 14th Five-Year Plan, which positions Hong Kong as a risk management centre.   Now it is time to look into the future. With our mature insurance market and established legal structure, we are well placed to embrace the enormous growth opportunities in the bay area market. A key focus is to work with the Insurance Authority (IA) to promote mutual access of the insurance market in the bay area.   Initiatives in the works include early establishment of after-sales service centres by our Hong Kong insurance industry in the Mainland cities of the bay area, with a view to providing bay area residents who are holders of Hong Kong policies with comprehensive support in different areas including enquiries, claims and renewal of policies for eligible insurance policy types.   We are also striving for the early implementation of the unilateral recognition policy for Hong Kong motor vehicles entering Guangdong through the Hong Kong-Zhuhai-Macao Bridge control point, so as to extend the coverage of third-party insurance policies issued by Hong Kong insurers for these cross-boundary motor vehicles to cover third-party liability in the Mainland, thereby deeming such policies as equivalent to the mandatory traffic accident liability insurance in the Mainland.   I am also excited to tell you that two new measures are coming up. Later this year, a draft bill will be introduced to our Legislative Council on a risk-based capital regime. This will align Hong Kong's regulatory regime with international standards and make capital requirements more sensitive to the level of risk borne by insurance companies. The IA has maintained close contact with the industry in undertaking preparatory work, including conducting three rounds of Quantitative Impact Studies to collect data for assessing the outcome on the solvency level of insurers and consulting the industry on the legislative proposals.   Another measure to come is the Policy Holders' Protection Scheme (PPS), which will more effectively protect insurance policyholders' interests and maintain market stability in the event of insurer insolvency. This scheme will serve as a safety net for policyholders by compensating policyholders or securing the continuity of insurance contracts in case an insurer becomes insolvent. At present, the IA is conducting a consultancy study to update the key parameters of the PPS, such as target fund sizes and lead time for accumulation. We plan to conduct a public consultation on the details of the proposed PPS this year and target to bring the bill to the Legislative Council in the subsequent legislative session.   The latest opportunities and developments in the international insurance markets have driven transformation in our local regime, and it is indispensable that regulation needs to keep pace with this ever-changing environment. To this end, the IA established a new group-wide supervision framework last year for insurance groups with a view to meeting international standards and establishing Hong Kong as a preferred base for large insurance groups in the Asia-Pacific region.   On the other hand, in advancing Hong Kong's role as a risk management centre under the 14th Five-Year Plan, the Government and the IA have several measures in place. Firstly, we have reached consensus with the China Banking & Insurance Regulatory Commission. Under the China Risk Oriented Solvency System, the capital requirement of Mainland insurers would be reduced when they cede business to eligible Hong Kong professional reinsurers. The consensus has been regularised since 2022 and this increases the competitiveness of Hong Kong reinsurers in obtaining insurance business ceded from Mainland insurers. A lower capital charge applicable to insurers will help lower insurance price and thereby better support Mainland enterprises in their investments in the Belt & Road countries.   Speaking of the Belt & Road, I would also like to mention the launch of the Belt & Road Insurance Exchange Facilitation (BRIEF). This pools together a cluster of key stakeholders and fosters synergies in exploring the business prospects arising from BRI. So far, 43 companies and organisations, including insurers, captive insurers, risk management experts, industry associations, etc, have joined BRIEF as members.   Last but not least, the IA also conceived the Specialty Risks Consortium to gather state-owned enterprises, captives, insurers, broker companies and risk advisers for deal matching and networking. Matching sessions have been arranged to probe into topics like political and credit risks, performance guarantee, employees' benefits, renewable energy, etc.   Ladies and gentlemen, just now I have shared with all of you the resilience of Hong Kong's insurance sector and the opportunities we have in the future. Despite the many challenges brought by COVID-19, which should be transitory, we are confident that the fundamentals underpinning Hong Kong's status as an international financial centre - our robust financial system and ample growth opportunities - remain strong and intact. With the staunch support from all of you, the actuarial and insurance industry professionals, the Government is committed to developing Hong Kong into an international insurance hub and risk management centre and I am more than confident we will work together to herald a better future.   Secretary for Financial Services & the Treasury Christopher Hui delivered this video speech at the International Actuarial Colloquium on April 27.
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