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Following is the speech delivered by the Financial Secretary, Mr John C Tsang, at the Hong Kong Federation of Insurers (HKFI) 25th Anniversary Gala Dinner today (August 8):
Thomas (HKFI Chairman, Mr Thomas Lee), distinguished guests, ladies and gentlemen,
Good evening.
It's indeed my great pleasure to join you on this very auspicious date to celebrate the Silver Jubilee of the Hong Kong Federation of Insurers.
The Federation was established 25 years ago, on the eighth day of the eighth month of the year 1988. I do not know whether this day was chosen by chance - I doubt it - or by someone with a strong sense of metaphysics.
Eight is considered a lucky number in Cantonese because it sounds like the word for "prosperity" (ľo). Either by good fortune or, more importantly, I think, through sheer hard work, the past quarter of a century has, indeed, been a prosperous time for our insurers and for our city.
The HKFI was established to meet the needs of the industry 25 years ago. It continues to play an important role in the growth of the insurance industry in tandem with that of Hong Kong.
Today, Hong Kong is a major international business and financial centre. The insurance industry has evolved and responded positively to the changing needs of our community by assisting individuals and corporations to manage their risk profile.
With valuable contributions by the Federation and from all the practitioners, insurance has become one of the major pillars of our financial services sector, recording annual double-digit growth for more than a decade. In terms of both insurance density and penetration, Hong Kong ranks second in Asia. This is a remarkable achievement.
Amidst the volatility of the global financial markets and extremely keen competition from our neighbours in Asia, we cannot afford to take our eye off the ball.
The Government is committed to enhancing our market quality and policyholder protection. We have been working closely with the insurance industry in taking forward a number of key initiatives, including setting up an independent Insurance Authority and establishing a Policyholder Protection Fund.
These are the most significant reform proposals for the insurance industry in recent times. I am grateful, truly, to the Federation and its members for reflecting the industry's aspirations to Government and for providing relevant advice along the way.
In addition to modernising our regulatory infrastructure, we must also innovate and explore new business opportunities. In my Budget in February this year, I proposed reducing the profits tax of the offshore insurance business of captive insurance companies by 50 per cent. This will help attract more enterprises to form captive insurance companies here in Hong Kong, in turn promoting the development of other related professional services, including accounting, actuarial and legal services, making Hong Kong's risk management services even more diversified.
With our thriving insurance sector, Hong Kong is an attractive location for captive insurance companies, especially for Mainland companies which are interested in managing their risks through innovative means.
The Mainland's robust economy also provides good business opportunities for the industry, including Renminbi-denominated policies.
To promote offshore Renminbi business, we shall take the opportunity to develop shipping services and marine insurance products with prices denominated in Renminbi. Hong Kong is well suited to become a leading international centre for both shipping and marine insurance products. I am pleased that the Federation has taken the initiative to commission a consultancy study on this topic and share the results with Government.
CEPA has brought huge benefits to Hong Kong and the Mainland. Insurance is one of the 48 services sectors which enjoy preferential cross-boundary market access. Three Hong Kong insurance companies have so far received approval to set up wholly owned insurance agencies in the Mainland.
The Government will continue to discuss with Mainland authorities ways to facilitate the insurance industry to explore the business and investment opportunities across the boundary. So far, nine insurers have obtained approval from the People's Bank of China to participate in the Mainland interbank bond market, giving them more flexibility in devising their business strategies.
Over the years, the HKFI has committed itself to enhancing the professionalism of the industry and instilling public confidence in insurance. The Federation and the industry provide valuable support to Government in educating people about the importance of insurance and implementing different measures and publicity programmes to enhance consumer protection. Through all these efforts, we have further strengthened our status as an international financial centre placing the interests of consumers at the core of our financial policies.
The great thinker Albert Einstein once said, "God does not play dice with the universe". His theory was that the physical world could be explained by natural laws, leaving little to chance. In reality, however, uncertainties and risks are part of everyday life. Being a science and profession of risk-management, insurance will continue to provide the necessary protection and peace of mind for people and enterprises.
I congratulate the Hong Kong Federation of Insurers on this auspicious occasion, and wish you all a memorable 25th anniversary. I also look forward to continued close collaboration between Government and the Federation in securing an even more prosperous future for our insurance industry and for our city.
Thank you very much and have a great evening.
Ends/Thursday, August 8, 2013
Issued at HKT 20:54
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