A captive insurer is set up by a parent company to provide all the firms in the group with insurance protection. This allows the group to better manage risks and retain profits that would otherwise go to an outside firm.
“This initiative enabled HSBC to retain insurance within the group and … better control the insurance costs and claims management,” said Winky Cheng, chairman and CEO of Wayfoong (Asia).
She said HSBC decided to set up its captive insurer in Hong Kong because it was a gateway to the mainland and had access to world-class financial hubs and major global reinsurance companies. Cheng also said the approval process only took seven months, underscoring Hong Kong’s regulatory development of capital insurance.
Hong Kong has offered tax incentives for captive insurers, according to Winnie Sun, a partner at Deloitte who also spoke on the panel.
