Jenny Yu, Partner at Johnson Stokes & Master(JSM), on the insurance and reinsurance as outlined in the 2026 Policy Address:
The 2026 Policy Address measures on insurance and reinsurance reflect a clear and welcome ambition: to position Hong Kong not just as a risk-transfer centre, but as a comprehensive international risk management hub. Strengthening the regulatory regime alongside the Insurance Authority’s push to grow reinsurance and captive insurance business shows a deliberate strategy to deepen the connection between our capital markets and the insurance industry.
The growth of the captive insurance sector is a promising signal, and the proposal to explore a protected cell company structure is a practical step that could meaningfully lower the barriers to entry for companies looking to establish captives or issue insurance-linked securities in Hong Kong. Cost efficiency has long been a key consideration for companies weighing Hong Kong against other jurisdictions.
Efforts to narrow the protection gap for catastrophe risk through insurance-linked securities, alongside a review of investor restrictions to invigorate the ILS trading market, are particularly timely given the increasing frequency of extreme weather events in the region. A more accessible ILS market would benefit both investors and insurers.
Finally, the recognition that emerging industries — from gold storage to green-fuel bunkering — will require new specialised insurance products and the initiative is a forward-looking acknowledgment that the sector’s growth must keep pace with Hong Kong’s broader economic diversification, encouraging insurers to expand their underwriting appetite into these areas will be important for the growth of these emerging industries.
