Hong Kong will introduce a wide range of measures, including tax incentives and regulatory reforms, to lure more international insurers to set up headquarters in the city as part of an effort to compete with Singapore for the crown as the region’s risk-management hub.

Chief Executive John Lee Ka-chiu unveiled a road map for the development of the local insurance industry on Monday at the annual Asian Insurance Forum, saying that he wants to see the city act as the insurance hub for the Greater Bay Area (GBA), the Belt and Road Initiative and projects related to climate change.

“The insurance industry, being an integral and substantial part of our economy, will continue to play an important role in this new chapter for Hong Kong,” Lee said at the in-person forum attended by hundreds of top insurance executives.

Twelve of the world’s top 20 insurance firms, or 60 per cent, have chosen Hong Kong as a base for their regional operations, Lee said.

However, almost a third of international insurance companies in Hong Kong said earlier this year that they were considering downsizing their operations because of a shortage of talent exacerbated by the city’s strict Covid-19 policies, according to a survey by the Hong Kong Federation of Insurers (HKFI).

Hong Kong has 164 companies offering life insurance and general insurance, versus 124 in Singapore.

However, if captive insurers – those set up by a parent company mainly to serve the company itself – are included, Singapore has a grand total of 206 insurers. Hong Kong has only a few captive insurers. Such units help large companies manage their risk while keeping the profit that would otherwise go to an outside insurer.

Lee said he is confident Hong Kong can attract large insurers and industry talent to Hong Kong. The government will develop more measures to allow Hong Kong-based insurers to tap business opportunities in the GBA and also the Belt and Road Initiative, he said.

Hong Kong is “back on stage, stronger than ever”, Lee said. Dedicated to tackling challenges in society and with support from the central government in the national 14th five-year plan, Hong Kong will “strengthen its function as an international risk-management centre under the country’s dual-circulation economic strategy”, he added.

The government will seek to expand cross-border insurance coverage in the Greater Bay Area and help companies implement long-awaited centres in the GBA cities of Nansha and Qianhai to serve the needs of customers who bought their policies in Hong Kong, Lee said.

“[The industry has] the knowledge and expertise to produce bespoke risk solutions for major infrastructure projects relating to the far-reaching Belt and Road Initiative,” he said.

The Insurance Authority is also on track to implement a risk-based capital regime in 2024, bringing the city’s regulations in line with international standards. In addition, the government will continue to help mainland and international insurers set up in Hong Kong as part of its wider campaign on “competing for enterprises”, Lee said.

“Starting next year, the Insurance Authority’s group-wide supervision regime has become fully aligned with international standards,” Lee said. “This makes Hong Kong an even more attractive base for insurance groups and strengthens our position as an insurance hub in the Asia-Pacific region.”

Lee’s belief that Hong Kong is an advantageous home for insurers earned support from Edward Moncreiffe, CEO of the Hong Kong office of HSBC Life.

“HSBC Life truly believes in the Hong Kong market’s potential as an insurance super-connector to Mainland China and the world,” Moncreiffe said. “As such, we fully support the road map as outlined by the government.”

HSBC Life will work with the government and the regulator to implement the new measures, he added.

Canadian insurer Manulife Asia, the longest-tenured life insurer in the city, also welcomed the road map.

The new initiatives under the blueprint “will strengthen Hong Kong’s competitive advantage as a global centre for the insurance industry”, said Damien Green, the company’s president and CEO.

“Manulife will continue to support the development of the insurance industry in Hong Kong and the broader Greater Bay Area, and we look forward to meeting demand from mainland Chinese visitors as they return to the city, in addition to our loyal Hong Kong customer base.”

UK insurer Prudential, has made a pivot to Asia and Africa as its key markets, with Hong Kong as its head office, said James Turner, the company’s group chief financial officer.

“We are especially excited about the opportunities in the Greater Bay Area,” he said. “We will continue to work closely with the regulators to support the integration of insurance products and services for the 70 million people in the GBA.”