HONG KONG, July 31 (Bernama-BUSINESS WIRE) -- A recent agreement that gives qualified reinsurers in Hong Kong preferential regulatory treatment over offshore reinsurers is expected to boost Hong Kong’s standing as a risk management hub in Asia providing reinsurance capacity and expertise, according to a new A.M. Best briefing.
The new Best’s Briefing, “Hong Kong Reinsurers to Receive Preferential Treatment from China Regulator,” discusses the agreement between the China Banking and Insurance Regulatory Commission and the Insurance Authority of Hong Kong that will allow mainland insurance companies that cede business to qualified Hong Kong reinsurers to be subject to a lower reinsurance credit risk charge. Previously, Hong Kong reinsurers were grouped with other offshore reinsurers and assigned baseline risk charge factors for credit risk exposure that were much higher than those applicable to onshore reinsurers.
The change is expected to encourage Mainland China insurers to give priority to high-quality Hong Kong reinsurers over other offshore reinsurers in placing reinsurance. A.M. Best expects the agreement to enhance Hong Kong reinsurers’ competitiveness in China and promote Hong Kong as a risk management platform for Chinese cedents, particularly in support of the country’s Belt and Road Initiative. This arrangement also could attract new capital to Hong Kong for those interested in tapping into the Chinese reinsurance market.
To access the full copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=276373.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visitwww.ambest.com for more information.
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