Following is the speech (English only) by the Financial Secretary, Mr Henry Tang, at the Hong Kong Federation of Insurers 2004 Annual Dinner at Conrad Hotel this (April 2) evening:
Mr Edward Lau, Distinguished Guests, Ladies and Gentlemen,
I am very pleased to join you tonight at this distinguished gathering of the insurance industry.
The Hong Kong Federation of Insurers has been playing a significant role in promoting the growth of Hong Kong's insurance industry since its inception in 1988. With over 180 insurance companies in Hong Kong, we take pride in having the highest concentration of insurance players in Asia and one of the most open insurance markets in the world. Employing over 50,000 people and with an annual premium income of more than HK$100 billion, the insurance industry continues to be a key sector of our financial industry and a solid pillar of our economy.
Notwithstanding the impact of SARS, the Hong Kong insurance industry performed rather well in 2003. The general insurance business recorded a underwriting profit of $1.6 billion and the life insurance business continued to achieve double-digit growth in premium income, indeed for the 11th year in a row. This impressive performance is testimony to the resilience of the Hong Kong insurance industry and the vitality of our insurance professionals.
Building on this solid foundation, the Government is committed to promoting the continued growth of the insurance industry. Our guiding principle is 'market leads and government facilitates'. The critical factors for business success are quick responses, flexibility and ability to foresee where the market is leading. These are the strengths shared by our successful entrepreneurs like many of you here. As a facilitator, the Government will strive to provide a conducive environment which allows private enterprises and talents to flourish. The Government will continue to uphold a business-friendly and effective regulatory framework, ensure a level-playing field, and enhance Hong Kong's competitiveness through upgrading human resources and promoting life-long learning. A notable example is the joint efforts made by the Office of the Commissioner of Insurance and the industry in launching the Quality Assurance Scheme for Insurance Intermediaries in 2000. The Scheme has been refined from time to time since then.
With our modern financial infrastructure and a large pool of insurance talents, Hong Kong is well placed to capitalize on the business opportunities offered by the Mainland's fast-growing economy. Last year, the Mainland's total premium income surged to US$47 billion, an impressive growth of 27% over 2002. The landmark free trade deal between the Mainland and Hong Kong, CEPA, provides Hong Kong insurance industry with a range of 'first mover' advantages. Most notably, our insurance companies are now permitted to form strategic alliances with Mainland firms to meet the market entry requirements.
Through CEPA, we have also made good progress in mutual recognition of qualifications and practising requirements for our insurance profession. The Office of the Commissioner of Insurance and the China Insurance Regulatory Commission have agreed in principle to set up an examination centre in Hong Kong to hold the Mainland Qualifying Examinations for Insurance Intermediaries. This new arrangement will substantially simplify the procedures for Hong Kong insurance practitioners to attain the necessary Mainland qualifications.
I am delighted to learn that some insurance companies and practitioners are already actively pursuing or exploring the opportunities provided under CEPA. I am confident that these companies and practitioners would display the same dynamism and professionalism as in Hong Kong, and that their presence would in turn facilitate the development of the Mainland insurance market. CEPA is surely a "win-win" strategy to both the Mainland and Hong Kong.
At the same time, we must not lose sight of the opportunities in Hong Kong. I am told that in terms of the number of life insurance policies per fixed population, Hong Kong's insurance penetration rate is still below that of many other advanced economies. This means there is plenty of room for expansion of our local insurance industry. Higher community awareness of insurance protection not only means business opportunities for the insurance industry, but also helps nurture the spirit of self-reliance, and in the longer term, lessens our future generations' burden in providing medical and health services for the elderly.
Ladies and Gentlemen, as the key representative body of the insurance industry, the Hong Kong Federation of Insurers has contributed so much to the industry and to Hong Kong as a whole. I am sure the Federation will continue its marvelous work. I wish you every success in your endeavors.
Thank you very much.
Ends/Friday, April 2, 2004