**********************************************************
Following is the speech by the Chief Secretary for Administration, Mr Henry Tang, at the opening ceremony of the 24th East Asian Insurance Congress 2008 at the Hong Kong Convention and Exhibition Centre today (November 24):
Mr Paul Kong (EAIC President), Mrs Agnes Koon (Hosting Organisation HKFI Chairman), distinguished guests, ladies and gentlemen,
It is my great pleasure to join you this evening.
Thank you for the chance to speak to you all today and outline Hong Kongˇ¦s role as an insurance hub in Asia.
We are delighted to be hosting this prestigious event for the second time. I congratulate the organising committee on arranging such a comprehensive schedule with so many distinguished speakers and guests from around the world.
A warm welcome to all of you.
Since 1962, the East Asian Insurance Congress has been a vital platform for insurance practitioners in this region to discuss global trends as well as local developments and establish closer co-operation in regional insurance development.
In recent months, the global financial crisis has sent shockwaves throughout financial markets around the world. Asia is no exception. The financial turmoil has exposed excessive risk-taking by financial institutions. It has also highlighted the importance of international co-operation to tackle the problems and restore confidence in the markets.
Set against the backdrop of global financial instability, this yearˇ¦s Congress is a particularly important one. Practitioners and regulators will have to work together at this critical moment to improve the regulatory regime, foster good corporate governance, and enhance the quality of our markets.
Hong Kongˇ¦s insurance sector faces some hefty challenges brought on by the global financial turmoil. The Insurance Authority has acted swiftly to shore up confidence in the insurance sector and to protect policyholders. The authority has stepped up monitoring of the financial and solvency positions of all authorised insurers in Hong Kong. If necessary, the authority will exercise its statutory power to take appropriate interventionary steps to protect policyholders. As we navigate through the financial storm our regulators will continue to uphold robust prudential supervision. We have one of the most sophisticated and crowded insurance markets in the region with a broad and deep pool of talent to help us get through these uncertain times.
For much of the past decade our insurance industry has recorded annual double-digit growth. Last year, the total insurance premium grew by 26% to US$25.3 billion, which accounted for 12% of our GDP. Hong Kong is top in Asia in terms of insurance density and third in Asia in terms of insurance penetration. Last year the penetration rate for life insurance policies was 111%.
We all know from the experience of the Asian financial crisis a decade ago that our economies are resilient and will emerge stronger as a result of the actions we take in the face of the current downturn. This is a good opportunity to conduct a health check on the current financial products and services available and explore new growth areas.
In Hong Kong we are constantly working to strengthen financial co-operation with the Mainland of China. The insurance sector is one of the services areas covered by our unique free trade pact with the Mainland called the Closer Economic Partnership Arrangement, or CEPA. Under CEPA insurance companies including foreign firms incorporated in Hong Kong can enjoy preferential access to the Mainland market.
Looking further afield, we are also encouraging more overseas companies to list on our stock market and we are making good progress in establishing a platform for Islamic finance in Hong Kong.
This way we will be in a strong position to take advantage of the opportunities that will undoubtedly arise once the global financial turmoil subsides.
Ladies and gentlemen, although my talk has focused on the impact of the global financial crisis, which affects all of us, there are other issues on our radar screen that will be addressed in great detail at this Congress. The three main themes are Terrorism & Political Risks, Climate Change and Ageing Population. These are extremely relevant to our region as we embrace globalisation and pursue sustainable development.
I look forward to learning more about how the insurance industry can address these pressing issues.
I wish you a successful Congress and an enjoyable stay in Hong Kong.
Thank you and have a great evening.
Ends/Monday, November 24, 2008
Issued at HKT 18:10
NNNN