Hong Kong touted as emerging ILS domicile

The Insurance Authority (IA) of Hong Kong hosted the inaugural Insurance-linked Securities (ILS) Conference on April 12, marking its first event tailored specifically for institutional investors and related professional service providers.

Stephen Yiu, chairman of the IA, underscored the pressing concerns surrounding climate change in his welcoming address, according to a news release.

“Climate change and financial volatilities have sharpened the focus on ILS as an attractive asset class from both the yield and diversification perspectives,” Yiu said, urging conference participants “to take full advantage of the friendly and efficient environment for ILS issuance forged in Hong Kong.”

Joseph Chan, acting secretary for Financial Services and the Treasury, said Hong Kong’s robust insurance sector would support it as an emerging ILS domicile.

“Hong Kong is home to an array of insurers and reinsurers with rich experience and expertise, providing a solid bedrock for our ILS ecosystem to develop,” Chan said.

Offering insights into the role of catastrophe bonds in mitigating economic impacts of natural disasters, Jorge Familiar, vice president and treasurer of the World Bank, delivered a keynote address. Familiar stressed the importance of collaboration and innovation in the ILS market to foster resilience in vulnerable nations worldwide.

The conference drew over 100 participants and speakers from Hong Kong, Mainland China, Asia Pacific, the United Kingdom, and the United State. Discussions revolved around the value proposition of the ILS market in Hong Kong, the global ILS investment landscape, and included a live catastrophe bond transaction roadshow tailored for eligible ILS investors.

The IA recently conducted a joint operation with the Independent Commission Against Corruption to crack down on the unlicensed sale of insurance policies to customers in Mainland China. The IA also recently announced updates to its ant-scam charter.

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