Market Overview

Best's Briefing: Regulatory Shift in China Likely to Boost Standing of Hong Kong Reinsurers


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

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

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