Strong need for mainland China to tap the capital markets: ILS Asia 2021

Mr. Simon Lam, Executive Director, General Business at the Hong Kong Insurance Authority, expects the region’s new ILS regime to “hit the ground running” as mainland China’s insurance market growth continues apace.

With the issuance of Greater Bay Re Ltd., sponsored by China Re, expected soon as the first catastrophe bond to be issued out of Hong Kong, the insurance-linked securities (ILS) universe has a new domicile to choose from.

Like Singapore, Hong Kong’s regime offers a grant scheme which covers some of the issuance costs of cat bond transactions, something which has helped to attract sponsors to Singapore’s platform and which is seen as important for new domiciles to gain traction.

FULL ORIGINAL PUBLICATION HERE

China’s government supportive of Hong Kong’s ILS strategy: ILS Asia 2021

As options to issue insurance-linked securities (ILS) and catastrophe bonds expand in Asia, with the introduction of Hong Kong as a regulated ILS platform, attendees at our virtual ILS Asia 2021 conference this morning heard of the support China’s government is offering to the initiative.

Our virtual ILS Asia 2021 conference, held in association with headline sponsor AM RE Syndicate Inc., began today with a keynote interview with Mr. Simon Lam, Executive Director, General Business at the Hong Kong Insurance Authority.

This interview can now be viewed on-demand here.

Hong Kong already has an established insurance and reinsurance market, while its legislative preparations for ILS were completed at the beginning of 2021.

FULL ORIGINAL PUBLICATION HERE

Greater Bay Re registered for China Re cat bond in Hong Kong

We’ve learned that the first company destined to be an insurance-linked securities (ILS) special purpose vehicle has already been registered in Hong Kong, with Greater Bay Re Limited established to issue a catastrophe bond on behalf of China Re, sources told us.

It’s an important sign of the state of readiness of Hong Kong’s legislative and regulatory framework for insurance-linked securities (ILS), showing that the Special Administrative Region is now ready for ILS activity and to become a domicile for catastrophe bonds.

The sponsor is also particularly noteworthy, as we’re told it will be China Property and Casualty Reinsurance Company Ltd. (China Re P&C), part of China Reinsurance Corporation, one of the largest insurance and reinsurance companies in China, but also with a global footprint thanks to operations in Lloyd’s of London and Singapore, as well as offices in Hong Kong and New York.

FULL ORIGINAL PUBLICATION HERE

Hong Kong publishes special purpose insurer (SPI) application guidelines

The Hong Kong Insurance Authority has today published guidelines related to its new insurance-linked securities (ILS) regulatory framework in the Government Gazette, with details on applications to establish special purpose insurers (SPI) in the domicile now finalised.

Hong Kong’s “Guideline on Application for Authorization to Carry On Special Purpose Business (GL 33)” is a comprehensive document that takes the completed legislation and turns it into something more usable, by making it relevant to those looking to apply to establish ILS structures in the Special Administrative Region (SAR).

Hong Kong’s readiness for ILS is now complete and with its pilot ILS grant scheme also available, alongside this guide for issuers and managers that helps in applying to operate ILS structures there, it may only be a matter of time until the first deal emerges.

FULL ORIGINAL PUBLICATION HERE

Hong Kong ILS enquiries already received from potential sponsors

It increasingly looks like Hong Kong could break into the insurance-linked securities (ILS) market before too much longer, as with details of its ILS grant pilot now available, one local law firm said it is already receiving enquiries from potential sponsors.

Back in February, Paul Chan, the Financial Secretary of Hong Kong, revealed plans for a Pilot Insurance‑linked Securities Grant Scheme that will pay as much as HK $12 million per issuance, which is close to US $1.6 million of potential ILS or catastrophe bond issuance cost savings for sponsors choosing to use Hong Kong as a domicile.

Then, in May this year, Hong Kong’s Insurance Authority (IA) published initial details of the insurance-linked securities (ILS) grant scheme.

FULL ORIGINAL PUBLICATION HERE

More & better “catastrophe-triggered” instruments needed: UN Sec-Gen Guterres

United Nations (UN) Secretary General António Guterres has again said that the world needs more catastrophe-triggered financing and better instruments to support the delivery of climate financing, to enhance disaster resilience, fund adaptation measures and finance climate risk.

Speaking today at the Insurance Development Forum’s (IDF) Summit 2021, UN Secretary General Guterres explained the important roles of the insurance sector (within which we’d include reinsurance and insurance-linked securities (ILS) of course) in adapting to a rapidly changing climate and the race to transition to net zero emissions by 2050.

With more than $35 trillion dollars of assets under management in the global insurance and reinsurance industry, Guterres said, “I encourage the insurance industry to align its portfolios and investments with net zero by 2050.

FULL ORIGINAL PUBLICATION HERE

Tencent shows tech’s appetite to own access to reinsurance capital

Tencent Holdings Ltd., the Chinese multinational technology conglomerate, has provided one of the clearest examples of a tech giant wanting to own its access to reinsurance capital, a trend we’ve been anticipating would emerge.

Our regular readers know we have a passion for technology, alongside risk transfer and use of efficient capital, believing that the efficiencies of advanced tech can be combined with efficient access to reinsurance capital, in order to provide better, more responsive and ultimately cost-effective insurance products to consumers.

There have been a number of glimpses of this kind of development over the years, with most of the major technology giants of the world having some interest in insurance or reinsurance, or toying with how they themselves access risk capital.

Amazon, Google, Tesla, among others, as well as investors in tech like Softbank, have all been closely linked with initiatives to access reinsurance capital more efficiently, either for pure risk management purposes, or to enable the delivery of customised and better-priced insurance solutions.

FULL ORIGINAL PUBLICATION HERE

参数化主权巨灾债券是“一带一路”的保险方式

通过与“一带一路”倡议相关的项目获得中国投资的中亚和东欧国家,应使用参数化主权巨灾债券来确保自身免受自然灾害的风险。

这是保险连结证券(ILS)和主权风险转移专家基里尔·萨符拉索夫(Kirill Savrassov)的观点。

萨夫拉索夫指出:《中国的“一带一路”倡议对中亚和东欧的全面保护方案提出了更高的要求》。

《中国将数百亿美元投入了该地区的基础设施建设,但实际上,其中连一个项目也没适当地投保物理伤害的险,尽管该地区面临着地震和其他自然灾害的高风险》。

在乌兹别克斯坦,哈萨克斯坦或塔吉克斯坦等国家,问题不是地震是否要发生,而是何时要发生,并且其毁灭力量多大。

自然灾害会破坏中国通过“一带一路”倡议帮助该地区发展的许多基础设施项目。如果建造后这种项目因地震而摧毁,那么东道国仍将欠缴中国的贷款,但是不会从基础设施投资中获取收益。

FULL PUBLICATION HERE

Hong Kong reveals insurance-linked securities (ILS) grant details

Hong Kong’s Insurance Authority (IA), the independent insurance and reinsurance regulator for the Hong Kong Special Administrative Region (HK SAR) of the People’s Republic of China, has now published initial details of its insurance-linked securities (ILS) grant scheme.

Back in February of this year, Financial Secretary of Hong Kong Paul Chan revealed plans for a Pilot Insurance‑linked Securities Grant Scheme that will pay as much as HK $12 million per issuance, which is close to US $1.6 million of potential ILS or catastrophe bond issuance cost savings for sponsors choosing to use Hong Kong as a domicile.

The Hong Kong Insurance Authority (IA) has now published details of a two-year Pilot Insurance-linked Securities Grant Scheme, which it says “provides an incentive for insurance companies and organisations to issue insurance-linked securities (ILS) in Hong Kong.”

FULL ORIGINAL PUBLICATION HERE

Singapore to reduce investment reporting & disclosure rules for ILS issuers

ARTEMIS: In aiming to make its insurance-linked securities (ILS) regulatory environment as appealing as possible, the government of Singapore is listening to market participants and enhancing rules surrounding ILS and catastrophe bond issuance structures, to reduce friction for sponsors and other parties involved in transactions.

Ever since the start of Singapore’s journey into insurance-linked securities (ILS), the country’s Monetary Authority has promised to listen to the industry and work to update its offering for ILS issuance, to meet sponsor and investor needs.

In a recent move, the Monetary Authority of Singapore (MAS) has proposed to reduce friction around the reporting and disclosure requirements of special purpose reinsurance vehicles (SPRV’s), as it looks to reduce operational friction involved with domiciling a catastrophe bond or other ILS and collateralised reinsurance arrangement in the country.

FULL ORIGINAL PUBLICATION HERE