Tag Archives: China

     Following is a question by Dr the Hon So Cheung-wing and a reply by the Secretary for Home and Youth Affairs, Miss Alice Mak, in the Legislative Council today (December 4):
 
Questions:
 
     It has been reported that the Secretary for Home and Youth Affairs led a delegation of all 18 District Officers (DOs) earlier on to Beijing and Zhejiang for a study programme on district governance, which included understanding the concept of co-ordinating different community organisations to participate in local governance through studying the “Fengqiao Experience” and the “Pujiang Experience”, with a view to enhancing district governance. In this connection, will the Government inform this Council:
 
(1) of the relevant details of the “Fengqiao Experience” and the “Pujiang Experience”, including the specific insights gained by DOs therefrom; whether it has studied how the essence of those Experiences will be applied to the district governance of Hong Kong in the future;
 
(2) whether it has plans to arrange for the members of various District Councils (DCs) to go to the Mainland to study the experience of district governance there; how it will train DC members to achieve the goal of being “mindful of the people, their responsibilities, and the rules”;
 
(3) given that the seventh-term DCs have operated for nearly one year, whether the Government has compiled statistics on the specific tasks and contributions of various DCs so far, and whether it has reviewed if all of those tasks have met the performance indicators; and
 
(4) given that the operation of DCs has been comprehensively enhanced, with various DCs being chaired by DOs of the respective Districts, whether the Government has reviewed if DCs have encountered new challenges that need to be overcome in the course of the enhanced operation?
 
Reply:
 
President,
 
     The Home and Youth Affairs Bureau (HYAB) provided a series of trainings to District Officers (DOs) and District Council (DC) members in 2024 to enhance their capabilities in discharging their duties and the efficacy of district governance on an on-going basis.
 
     For the individual parts of the question, our consolidated reply is as follows:
 
(1) & (2) The Secretary for Home and Youth Affairs led a delegation of 18 DOs for a study programme on district governance in April 2024, comprising lectures at the National Academy of Governance and a visit to Zhejiang Province, so to have a deeper understanding of the national policies and development and learn about the experiences in district governance in the Mainland. Subsequently, the HYAB also arranged DC members to visit Zhejiang Province or Shanghai by batches from July to October 2024 to study the national theories of grassroots governance and conduct site visits to observe first-hand the practical experiences of district governance in the Mainland.
 
     The tenets of “Fengqiao Experience” are to have the well-being of the people close to our hearts, and to systematically prevent and resolve conflicts at early stages; while “Pujiang Experience” advocates for “turning people’s petitions into leaders’ personal outreach to the grassroots, connecting with the people, and dedicating real effort to understand and address the needs of the people with hearts”. These experiences emphasise on building a strong relationship between the Government and the people so to strengthen grassroots governance.
 
     Through lectures and visits to better understand the application of “Fengqiao Experience” and “Pujiang Experience” in different places in the Mainland, DOs and DC members appreciate the need to enhance communication with the people in district governance. They have to understand the people’s pressing issues and problems that are of concern so as to address their issues and problems early. People could then have a sense of satisfaction and fulfilment in their daily life. For example, after the improvements to governance at the district level, when torrential rain causes flooding in certain areas, District Offices, DCs and District Services and Community Care Teams (Care Teams) would plan disaster prevention work well ahead of time, so as to identify, address and resolve difficulties faced by the people pre-emptively. DOs, together with DC members and relevant departments, would also visit locations affected by flooding and formulate suitable improvement measures for the future. DC members would also actively assist District Offices in engaging residents to expedite the implementation of improvement measures so as to benefit local residents and improve their living environment early.
 
(3) Since the new-term DCs took office in January 2024, their advisory and service functions have been markedly enhanced and the overall performance has been satisfactory. After taking office, DCs immediately addressed the issues of concern in the district and collected views from the people. Various committees and working groups were also established to follow up on district affairs. DC members have also actively participated in district work and set up their ward offices. To strengthen their communication and interactions with residents, DC members have been meeting residents in person regularly under the “Meet the Public Scheme” arranged by the District Offices, as well as setting up street counters and visiting buildings in the district in person. DC members have been discharging their duties to ensure effective two-way communications between the Government and the public.
 
     DC Secretariats have regularly uploaded DC members’ attendance at meetings to the DC website for reference by members of the public. Pursuant to the Performance Monitoring Guidelines for DC members, DC members are required to submit work reports to DC Chairmen every year, elaborating on the major work done during the year. The work report shall be completed within two months after the end of the reporting period. The HYAB have all along been monitoring the work of DCs and DC members, so to ensure DC members fulfil their duties and responsibilities.
 
(4) Under the improved governance at the district level, DOs serve as the DC Chairmen, the commanders of Care Teams, as well as the Chairmen of the District Management Committees. Under the arrangement, DOs can better co-ordinate government departments, DC members, Care Teams and district committees, so to facilitate their collaboration and create synergy to serve the public more effectively. The public also have higher expectations on the Government in relation to district governance, especially on resolving district issues that were long-standing, large scale and complex. DOs would balance between different perspectives and adopt pragmatic and innovative approaches. They would deploy resources and manpower efficiently, and strengthen the co-ordination amongst district organisations and groups to work with the Government, so that the Government’s policies can be fully implemented in the district and ultimately benefit the people. read more

     Following is the speech by the Chief Executive, Mr John Lee, at the 25th Hong Kong Forum Keynote Luncheon today (December 4): 

Mr Hans Poulis (Chairman of the Federation of Hong Kong Business Associations Worldwide), Dr Peter Lam (Chairman of the Hong Kong Trade Development Council), friends of Hong Kong from around the world, distinguished guests, ladies and gentlemen, 

     Good afternoon. Welcome to Hong Kong, and the annual Hong Kong Forum – the landmark 25th edition of the Forum.

     This year’s anniversary event gathers some 400 businesspeople from all over the world, from every sector and industry, here – this year and every year, for a quarter of a century now.

     Many of you are part of the Federation of Hong Kong Business Associations Worldwide, a global network spanning across some 40 countries and world, counting over 11 000 members around the globe. You are international businesspeople, united by the strong belief in, and commitment to, the city of Hong Kong. Most importantly, you are here, because Hong Kong means business.

     Our “one country, two systems” principle makes that possible. It gives Hong Kong singular business, trade and financial opportunities, with the full support of China, our country, while allowing us to do what we have long done so well for so many – and that’s create opportunities and connections. Hong Kong, ladies and gentlemen, is the world’s “super connector”. Your super connector. 

     Hong Kong has long attracted businesses and investors, thanks to our clear and compelling advantages – from a free and open investment environment and simple and low tax system, to modern infrastructure and logistics networks and the unfettered flow of information, capital, goods and people.

     It helps, too, that Hong Kong boasts a long-standing commitment to the rule of law, and is built on a common law system, one that resembles the legal system in many major global financial centres. We are the only common law jurisdiction in China, and the only common law jurisdiction in the world with a body of law accessible in both Chinese and English, our official languages.

     Our advantages are widely recognised. Hong Kong is the world’s 10th largest merchandise trading entity, and the world’s fourth-largest foreign direct investment destination.  

     Canada’s Fraser Institute, in its 2024 Economic Freedom of the World Report, ranked Hong Kong the world’s freest economy, number one. We also topped the Report’s “freedom to trade internationally”.

     In this year’s World Competitiveness Yearbook, published by the Swiss-based International Institute for Management Development, Hong Kong ranked fifth globally, up two places from last year. We also topped the global rankings in international trade and business legislation.  

     To build on our strengths, the Hong Kong SAR (Special Administrative Region) Government has implemented a wide range of initiatives, over the past two years, promoting economic opportunities. 

     We are pressing ahead with the development of the “eight centres” of excellence, as set out in the 14th Five-Year Plan, as well as the Northern Metropolis, the new engine of Hong Kong’s economic future. We’ve also set up Hong Kong Talent Engage and the Office for Attracting Strategic Enterprises, to boost our strategic value and drive for talent and enterprises.

     The Northern Metropolis, which makes up one-third of Hong Kong’s area, enjoys the advantage of a close proximity to Shenzhen, one of the most energetic cities on the Mainland. Indeed, the World Intellectual Property Organization has, for five years in a row, ranked the Shenzhen-Hong Kong-Guangzhou science and technology cluster second, globally, in its Global Innovation Index.

     These three neighbouring cities, together with Macao and seven other cities in southern China, form the Guangdong-Hong Kong-Macao Greater Bay Area, the GBA.

     The GBA boasts a population of 86 million and a combined GDP (Gross Domestic Product) of US$1.9 trillion, rivalling that of the world’s 10th largest economy. Hong Kong is joining hands with other cities in the GBA to develop into an international innovation and technology (I&T) centre.

     We are developing in the Loop, an area in the Northern Metropolis that straddles across the boundary between Hong Kong and Shenzhen, a science and technology innovation co-operation zone. We will roll out a series of measures that facilitate the flow of personnel, materials, capital and data between Hong Kong and Shenzhen in the zone. 

     The zone will provide wide, and welcome, opportunities for a world of investors and entrepreneurs to pursue I&T developments, capitalising on the best of both sides of the Shenzhen River, and tapping into the vast Mainland market.

     And much more is in the policy pipeline. In my annual Policy Address, in October, I introduced initiatives to enhance Hong Kong’s position as an international financial, shipping and trade centre. Integrating their strengths, we will create a high value-added supply chain centre in Hong Kong, attracting Mainland Chinese and overseas companies to establish international or regional headquarters here. 
  
     Hong Kong offers diversified advisory services for enterprises, as well as extensive networks in offshore trading and supply chain management. In realising this development, I am counting on the expertise and far-reaching connections of the Trade Development Council and Invest Hong Kong.

     My Policy Address also focused on high value-added industries, such as the low-altitude economy. A working group will come up with strategies and interdepartmental plans to help open up the low-altitude airspace. Pilot projects will explore drone use for surveys, performances, delivery and other prospects. 

     Similarly, we are committed to driving innovation in telecommunications, artificial intelligence and the wide-ranging, ever-evolving digital industry.
 
     We strive to attract the best enterprises and talent to Hong Kong. We have got good news on these fronts, I’m pleased to add. Our Office for Attracting Strategic Enterprises, set up just two years ago, has already brought to Hong Kong over 60 strategic enterprises. They are from such key industries as artificial intelligence and data science, life and health technology, fintech, and advanced manufacturing and new energy technology. These enterprises are expected to bring in HK$42 billion in investments and create over 17 000 jobs.
 
     As for talent, the enhanced talent attraction regime launched by us two years ago is seeing encouraging results as well.  Some 160 000 professionals have already settled in Hong Kong with their families over the past two years.

     We go all out in bringing the best to Hong Kong. In July, I led a high-level delegation to Laos, Cambodia and Vietnam, following my visit, last year, to Singapore, Indonesia and Malaysia. I also made my first visit, as Chief Executive, to Saudi Arabia and the United Arab Emirates last year.
 
     Highlights of these visits included the signing of some 100 MOUs covering a wealth of sectors, industries and institutions. The agreements will create fresh opportunities for collaboration between Hong Kong and our valued partners in ASEAN (Association of Southeast Asian Nations) countries and the Middle East. 

     Alongside our overseas visits, the Government maintains 16 offices and liaison units in the Mainland and 14 Hong Kong Economic and Trade Offices overseas. 

     Add Invest Hong Kong and the Trade Development Council’s worldwide offices, and Hong Kong has a formal presence in 66 cities covering 129 countries. 

     We are believers, too, in the immediate benefits and long-term promise of free trade agreements, as well as investment agreements.

     To date, we have signed 24 investment agreements with 33 economies, and nine free-trade agreements (FTAs) with 21 economies. That includes our latest FTA, with Peru. It was signed just a few weeks ago, on the sidelines of the Asia-Pacific Economic Cooperation Economic Leaders’ Meeting in Lima, the Peruvian capital. Coupled with an earlier FTA with Chile, it reinforces the message that Hong Kong looks forward to creating closer economic ties throughout Latin America.

     Investment agreement negotiations with Bangladesh and Saudi Arabia, let me add, are in full swing. And we will explore bilateral FTA prospects with economies in the Middle East. 

     These wide-ranging trade, investment and co-operation agreements will certainly boost Hong Kong’s status as an international trade centre and “super connector” to the world.

     We hope soon to add RCEP, the Regional Comprehensive Economic Partnership, to our FTAs and global connectivity. RCEP, of course, is the world’s largest FTA and includes all 10 members of ASEAN.

     We have received positive responses from a number of RCEP members in support of Hong Kong’s accession to RCEP. And I am pleased to note that RCEP’s Joint Committee recently adopted an accession protocol for new members, underlining the Partnership’s commitment to openness and inclusivity. 

     Our accession to RCEP will strengthen our trade relations and business ties with the countries of ASEAN and RCEP, as well as the cities of the Greater Bay Area, bringing mutual benefits to all.

     And we recently signed an amendment to the Agreement on Trade in Services of CEPA, the Mainland and Hong Kong Closer Economic Partnership Arrangement. The amended CEPA will introduce further liberalisation measures across several services sectors in which Hong Kong enjoys competitive advantages. 
 
     On implementation of the revised CEPA, Hong Kong-invested enterprises will be able to “adopt Hong Kong law” and choose Hong Kong for arbitration in the Greater Bay Area.  

     There’s more. The three-year requirement for business operations in Hong Kong to qualify as a “Hong Kong service supplier” has been removed for most sectors. That will allow companies and entrepreneurs, worldwide, to use Hong Kong as their base for expanding into the Mainland market, enjoying preferential treatment under CEPA that much faster.  
 
     I’m pleased to add that the multiple-entry visa for foreign staff of Hong Kong-registered companies has been extended, to a maximum of five years.  

     These and many other concrete measures underline the unparalleled advantages Hong Kong offers overseas businesses and investors, and our distinct role as a “super connector” and “super value-adder”.

     In face of challenges in geopolitical tensions and transformation in the global order, Hong Kong remains committed to development and progress. We are dedicated to free trade and working to ensure a flourishing future for our economy and our community. And that includes all those who work with us, who believe in Hong Kong. Ladies and gentlemen, that certainly includes you. 

     I am grateful to the Federation of Hong Kong Business Associations Worldwide and the Hong Kong Trade Development Council for organising this milestone 25th anniversary Hong Kong Forum, for bringing us together once again. 

     I wish you all a rewarding Forum and the best of business in the coming year. I invite you, too, to find time for Hong Kong, a world city, and the rising East-meets-West centre for international cultural exchange. 

     That includes giant pandas. If you’re out and about this Saturday afternoon, Ocean Park is holding a Giant Panda Greeting Ceremony, in honour of the two giant pandas our country gifted us in September. A fantastic, or should I say, a “pandastic” time is guaranteed for all. 

     I wish you the best of business in the year to come. Thank you!

    

     Following is a question by the Hon Chan Pui-leung and a reply by the Acting Secretary for Health, Dr Libby Lee, in the Legislative Council today (December 4):

Question:

     The Voluntary Health Insurance Scheme (VHIS), which was fully implemented on April 1 2019, aims to provide the public with an additional choice of using private healthcare services through hospital insurance. Regarding the implementation of VHIS, will the Government inform this Council:

(1) of the number of policies of certified plans, the sums insured and the age distribution of insured persons under VHIS to date; whether the authorities have estimated the total savings in public healthcare expenditure since the implementation of VHIS; if so, of the details; if not, the reasons for that;

(2) of the number of taxpayers who claimed tax deduction for participating in VHIS and the total amount of qualifying premiums allowed for tax deduction in the past three years of assessment; whether the authorities have plans to further raise the ceiling for VHIS tax deduction in the future, so as to encourage more people to participate in VHIS; if so, of the details; if not, the reasons for that; and

(3) given that VHIS has been implemented for more than five years, whether the authorities will conduct an interim review on VHIS and set a target for the number of VHIS participants in the future; if so, of the details; if not, the reasons for that?

Reply:

President,

     I provide a consolidated reply to the question raised by the Hon Chan Pui-leung as follows:

     The Voluntary Health Insurance Scheme (VHIS) is one among many medical insurance products. The Government introduced the VHIS in April 2019 to establish standards and improve market transparency for individual indemnity hospital insurance products (IHIPs), providing consumers with greater confidence in using private healthcare services through purchasing health insurance. VHIS Certified Plans need to fulfill a number of requirements on consumer protection, including:

(1) guaranteed renewal up to the age of 100 regardless of any change in the health conditions of the insured persons; 
(2) no “lifetime benefit limit”; 
(3) covering unknown pre-existing conditions and day case procedures (including endoscopy); 
(4) no unreasonable charging of differential premiums on individual policy holders; and 
(5) covering psychiatric inpatient treatments in local hospitals etc. 

     There are two types of VHIS Certified Plans, namely Standard Plan and Flexi Plans. Standard Plan benchmarks the minimum complying requirements, including the basic benefit coverage and specified claimable amount; whereas Flexi Plan allows greater flexibility in product design by insurance companies to offer additional protection on top of Standard Plan, such as higher benefit limits and broader benefit coverage to cater for the needs of different consumers. 

     To provide an additional incentive for further encouraging citizens in purchasing VHIS Certified Plans, taxpayers are allowed to claim tax deductions for VHIS qualifying premiums which they paid for themselves and all specified relatives. The maximum deductible amount of premiums paid for each insured person is now $8,000 per year of assessment. 

     The VHIS has been launched for nearly five years, three of which coincided with the COVID-19 epidemic when the usage of private healthcare services by Hong Kong residents was significantly impacted. Both the service volume and location pattern also differed considerably as compared with the pre-epidemic era. It is thus premature to draw any conclusion on the effectiveness of the scheme at this very stage.

     As at March 31, 2024, the number of policies of VHIS Certified Plans was about 1 341 000, with 97 per cent of the insured persons having purchased Flexi Plans. This shows that quite a number of consumers in the market may prefer having a higher level of medical protection. Among all insured persons, more than half (about 53 per cent) of them were below the age of 40, about 35 per cent were aged 40 to 59, and about 12 per cent were aged 60 or above. The younger profile among policy holders has been in line with the Government’s policy to encourage citizens to get insured at a younger age. 

     Despite the epidemic, the number of VHIS policies has recorded steady growth. The latest figure as at 2023 shows that VHIS policies accounted for nearly one-third of the IHIP market share in Hong Kong. We believe that the VHIS will become the mainstream standard for the IHIP market in the long run and provide citizens with greater confidence in purchasing VHIS products to choose private healthcare services when in need, thereby alleviating the burden on the public healthcare system.

     Based on the latest information available from the Inland Revenue Department, there were 247 000, 329 000 and 404 000 taxpayers who claimed tax deductions in the three years of assessment from 2020/21 to 2022/23, involving a total of $1.693 billion, $2.355 billion and $2.987 billion in VHIS qualifying premiums respectively. For instance, about 74 per cent of the insured persons had their paid premiums fully deductible in the year of assessment 2022/23. We consider that the current ceiling of tax deduction remains appropriate, and will review it from time to time in view of economic development and market demand.

     The Health Bureau will continue to monitor the implementation of the VHIS, collect market data and canvass the views of various stakeholders so as to align it with various public health policies of the Government. As an example, in view of the imminent operation of the Chinese Medicine Hospital of Hong Kong, the Government has initiated dialogue with the insurance sector on covering relevant medical expenses under the VHIS in future. Relevant discussions are actively underway. Moreover, the Government is willing to review the possible areas of refinement for the VHIS in due course, such as the benefit items to be covered, service charges and benefit limits. This serves to ensure that the VHIS can keep abreast with the latest trends in the healthcare market and achieve sustainability while catering for the needs of the public.

     In the meantime, the Government will also focus on deepening reform of the healthcare system. As announced by the Chief Executive in his 2024 Policy Address, the Government will develop quality indicators for public and private healthcare systems and explore legislating for private healthcare price transparency to enhance service efficiency and address the issue of medical inflation, with the plan to consult the healthcare sector next year. Other measures include establishing a professional platform for developing evidence-based clinical protocols and exploring the feasibility of devising service quality and efficiency standards for public and private healthcare sectors, as well as amending relevant legislation to require all healthcare providers to deposit essential health data in the personal eHealth accounts of members of the public. These would contribute to enhancing the quality and efficiency of healthcare services in Hong Kong including those in the private sector.

     Thank you, President. read more

The following is issued on behalf of the Hospital Authority:      The spokesman for Grantham Hospital made the following update today (December 4) regarding a patient leaving the hospital without notification earlier: &nb… read more

     Following is the speech by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, at the Insurtech Insights Asia Conference 2024 today (December 4):
 
Kris (CEO of Insurtech Insights, Mr Kristoffer Lundberg), distinguished guests, ladies and gentlemen,
 
     It is an honour to join you at the Insurtech Insights Asia Conference 2024. Let me begin by thanking Insurtech Insights for organising this important event, which gathers a distinguished group of local and international delegates, including some of the most influential leaders in the insurance industry. This conference is a vital platform for fostering collaboration, building connections, and generating new opportunities in the dynamic and evolving world of insurance.
 
     Today, we stand at a critical juncture for the global insurance industry. As risks become more complex and unpredictable, the industry must adapt and innovate to address challenges and seize opportunities. Hong Kong, with its vibrant insurance ecosystem and strategic position as a leading global financial centre, is well positioned to play a pivotal role in shaping the future of insurance.
 
     I will highlight three key roles that define Hong Kong’s approach to strengthening our position as an international risk management hub: Connector, Catalyst, and Creator. These three Cs pillars will guide our efforts to navigate current challenges and unlock future opportunities.
 
The changing insurance landscape
 
     The global insurance industry is undergoing profound transformation. Risks are becoming increasingly intricate, driven by geopolitical tensions, climate change, and emerging cyber threats. These factors are reshaping the way insurers assess and manage risk.
 
     Despite these challenges, the insurance market has shown remarkable resilience. Robust demand has propelled the industry to a new equilibrium, with global life premiums projected to grow by 2.9 per cent in real terms and non-life premiums by 3.3 per cent in 2024, according to market research. This growth underscores the sector’s resilience and its vital contribution to economic stability and development.
 
     Hong Kong plays a unique role in this global landscape. Last year, the city’s total gross premiums increased by 0.8 per cent, reaching more than HK$540 billion, while 157 authorised insurers operated in the region as of end-June this year. These figures reflect our strength as a leading insurance market and its potential to drive global industry transformation.
 
     To build on this very sound foundation, we are focusing on the three “C”s – Connector, Catalyst, and Creator – to further solidify Hong Kong’s position as a global risk management hub.
 
Connector: enhancing regional collaboration
 
     First of all, as a Connector, to enhance regional collaboration. This is about Hong Kong’s role as a Connector, facilitating collaboration between local and international businesses and serving as a gateway for Mainland enterprises to expand globally.
 
     Hong Kong’s strategic position as the nexus of domestic-international dual circulation makes it an ideal platform for facilitating cross-border opportunities. The National 14th Five-Year Plan explicitly supports Hong Kong’s development as both an international financial centre and a global risk management hub. This reinforces our role as a “super-connector”, enabling seamless integration between the Mainland and international markets.
 
     Recent initiatives announced in the Chief Executive’s 2024 Policy Address reflect this commitment. For example, we are working to enhance mutual access to insurance markets within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). Specific measures include reviewing the risk-based capital (RBC) regime introduced earlier this year and examining capital requirements for infrastructure investments. Furthermore, we continue to invite Mainland and overseas enterprises to establish captive insurers in Hong Kong and commence the legislative preparatory work for establishing a policy holders’ protection scheme in Hong Kong. These initiatives aim to diversify risk portfolios, encourage infrastructure investment, and strengthen the resilience of the insurance sector.
 
     The GBA, with its more than 86 million residents and combined GDP (Gross Domestic Product) of approximately US$14 trillion, presents unparalleled opportunities for growth. By facilitating the free flow of people, goods, and capital across these 11 GBA cities, we are creating a seamless environment for the industry, in particular the insurance industry, to thrive.
 
     To support Hong Kong policyholders living or working in the GBA, we are striving to establish after-sales service centres in key locations such as Nansha and Qianhai. These centres will provide essential services, including policy inquiries, premium renewals, and claims support, further promoting the integration of insurance markets between Hong Kong and the Mainland.
 
     Additionally, we have implemented the unilateral recognition policy for cross-boundary motor insurance, which aligns with the commencement of Northbound Travel for Hong Kong vehicles on July 1, 2023. This policy provides a more convenient way for drivers to secure the necessary insurance coverage for operating relevant vehicles to drive on the Mainland. Currently, an amount of 22 local insurers, representing approximately 90 per cent of the relevant market segment, are offering such products.
 
     Also, we are encouraging the development of cross-boundary insurance products, such as health insurance policies tailored to the needs of individuals and businesses operating across the GBA. These efforts aim to strengthen connectivity and support the seamless movement of people and goods within the region.
 
Catalyst: driving change and addressing emerging challenges
 
     Now comes to the second “C”, which is about Catalyst, to drive change and addressing emerging challenges. It is about Hong Kong’s role as a Catalyst for innovation and adaptation in the face of emerging global challenges.
 
     The insurance industry is confronting unprecedented risks, particularly from natural catastrophes. Last year, market study found that global insured losses from natural disasters exceeded US$100 billion for the fourth consecutive year, an alarming trend that underscores the urgency of building resilience. With insured losses totalling US$60 billion in the first half of this year – 62 per cent above the 10-year average – we must recognise that the challenges we face require us to think differently about risk and resilience.
 
     In response, the Government published the “Development Roadmap for the Insurance Sector in Hong Kong” in December 2022. This strategic document outlines our vision for consolidating our position as a global risk management hub while addressing the evolving needs of the sector.
 
     We had taken a series of key measures a few years ago to strengthen our role as an international risk management hub. We have implemented legislative amendments to offer half-rate profits tax concession for marine and specialty lines of insurance business, expand the scope of risks insurable by captive insurers formed in Hong Kong, and enhance the legal framework for group-wide supervision, with three international insurance groups designated in Hong Kong thereunder.
 
     We have rolled out a regulatory regime for special purpose insurers and a pilot grant scheme for insurance-linked securities (ILS), underscoring our commitment to innovation in the sector. We have seen so far five ILS issuances in Hong Kong, all in the form of catastrophe bond and with a total insurance amount of more than US$700 million, securing protection against losses inflicted by tropical cyclones and earthquakes on the Mainland and overseas places. Two ILS sponsored by the World Bank have been listed on the Hong Kong Stock Exchange.
 
Creator: innovating through insurtech
 
     Finally, the “C” is about Creator, concerning innovation. The third pillar is about our role as a Creator of innovative insurtech solutions, which very much echo the theme of today’s conference. The challenges posed by climate change, demographic shifts, and evolving customer expectations demand continuous innovation. Technology plays a central role in addressing these challenges, narrowing protection gaps, and promoting financial inclusion.
 
     Global insurtech investment is projected to reach more than US$4 billion by the end of this year, reflecting the sector’s transformative potential. Technologies such as AI (artificial intelligence) are revolutionising risk management, enhancing customer experiences, and streamlining operations.
 
     Hong Kong is at the forefront of this transformation. The Insurance Authority (IA) has launched several initiatives to foster innovation, including the Fast Track and Insurtech Sandbox. These platforms encourage collaboration between traditional insurers and insurtech start-ups, enabling them to test new ideas and bring innovative products to market efficiently.
 
     To date, four virtual insurers operating exclusively through digital distribution networks and channels have been authorised under the Fast Track. Meanwhile, the Insurtech Sandbox provides a controlled environment to test out innovative solutions, reduce development costs, and expedite the launch of new products.
 
     The introduction of the Open API (Application Programming Interfaces) Framework last year has further enhanced data exchange and transparency in the insurance market. By providing industry players with guidance on deploying API technology, this framework fosters partnerships between insurers and tech ventures, ultimately improving services for policyholders.
 
     Our insurtech ecosystem is also playing a key role in supporting the Belt and Road Initiative (BRI). Multinational insurers and reinsurers based in Hong Kong are leveraging advanced technologies to provide professional services for BRI-related infrastructure and investment projects. Through supportive measures and also policies and more importantly active engagement by the IA, we aim to attract more Mainland enterprises to establish captive insurers in Hong Kong, enhancing their risk management capabilities.
 
     All these efforts reflect our very commitment to positioning Hong Kong as a global leader in insurtech innovation, driving positive disruption and creating value for the industry and our customers.
 
Closing remarks
 
     Ladies and gentlemen, the future of the insurance industry is filled with both challenges and opportunities. By embracing change, fostering innovation, and strengthening collaboration, Hong Kong is well positioned to lead as a global risk management hub.
 
     I invite all of you – leaders and innovators from Hong Kong and afar in risk management – to join us in shaping the future of this vital industry. Together, we can drive innovation, enhance resilience, and create a more inclusive and sustainable insurance ecosystem.
 
     Before I close and before I wish you all a great conference, for those who are new to Hong Kong, apart from attending the conference, I hope you can enjoy the natural landscape with more than 40 beaches and hiking trails of more than 500 kilometres in Hong Kong, which are actually a few minutes away from here. Thank you.