Media365
Hong Kong is set to challenge London’s dominance in marine insurance as Middle East tensions highlight the city’s ability to provide war-risk cover at a lower cost, according to the local insurance regulator’s chairman.
Stephen Yiu Kin-wah on Tuesday said the Insurance Authority had supported insurers in launching a special war-risk insurance pool last November, which now covered 10 mainland Chinese ships sailing in the Gulf.
The pool, backed by five Hong Kong insurers, offers up to US$130 million in compensation for shipowners in Hong Kong and the mainland against war and emergency risks.
“The Middle East tensions in recent days have proven that the marine specialty risk pool is very much needed to provide insurance cover to shipowners,” Yiu said. “This is very important for Hong Kong to act as a marine insurance centre in the region, as it shows the city has the capacity to provide this type of cover.”
Without such a pool, Chinese and Hong Kong shipowners could only turn to London for cover, Insurance Authority CEO Clement Cheung Wan-ching said, adding they would have been expected to pay more than in Hong Kong.
“China owns one of the largest numbers of ships worldwide, while Hong Kong insurance companies are familiar with these Chinese companies and their business models,” Cheung said. “It is therefore Hong Kong’s role to provide marine insurance cover for these shipowners at a cheaper cost than overseas insurance markets.”
