New Hong Kong insurance watchdog facing hiring challenge

The Independent Insurance Authority is expected to struggle to fill some 300 vacancies, given the limited pool of industry talent, particularly in specialist areas such as investment.
New Hong Kong insurance watchdog facing hiring challenge

Faced with the challenge of recruiting some 300 people, Hong Kong's new insurance regulator – due to go live next year – may struggle to fill the vacancies amid a dearth of talent, say industry observers.

Candidates for the chief executive and five executive directors positions are being vetted by the Independent Insurance Authority (IIA). The search extends to international markets, as local experts confirm that Hong Kong does not have an extensive pool of insurance expertise.

Hong Kong recruiter Alan Paul told AsianInvestor that in his experience of dealing with insurance companies, a frequent complaint was that the pool of qualified talent in Hong Kong was very limited. Specialists such as actuaries and insurance investment executives are in particularly short supply.

Turnover in the insurance sector is relatively high, he said, even compared with banking's hire-and-fire approach tied to the economic cycle. In this wage spiral, insurance professionals can expect a typical salary uplift of up to 30% from current levels, said Paul.

A spokesperson for the Hong Kong search firm leading the recruitment drive confirmed IIA was conducting a global search for senior executives. She added that it could take a while to conclude and depended on a number of factors, including the length of the candidates’ notice period. 

Paul said any serious search for quality would be bound to include the overseas market, but added: “It’s expensive to import a high-level expatriate from the UK, and there are always challenges in integrating these people into the Hong Kong work environment.”

The IIA is part of the Hong Kong government’s plan to bring insurance sector regulation up to global standards, replacing the Office of the Commissioner of Insurance (OCI) with an independent body. The new entity will have much wider powers, including the ability to impose penalties, much as the local Securities and Futures Commission does for the securities markets.

As well as the regulation of insurance intermediaries, the new body will be charged with implementation of a risk-based capital framework, group-wide supervision of insurance groups, enhanced corporate governance and prudential surveillance of insurers.

The OCI has around 150 staff, some of whom will be re-hired for the new entity. The transition for those people will be complicated by their wanting to be compensated for loss of housing and pension allowances, said Martin Lister, partner at law firm Simmons & Simmons.

“It is critical that the authority gets the best talent from the current commission, for the sake of continuity and institutional memory," he told AsianInvestor. "These people have worked with the insurers and they understand the local environment."

The IIA has already appointed a chairman, Moses Cheng, who confirmed he aims to hire 299, with the aim of having 250 in place by the end of the year.

The new body will need to hire actuaries, accountants and lawyers who are familiar with the insurance business, not just regulation. To meet their own quality standards, they will be forced to look overseas, said Lister.

He expects the process to extend well into next year, once premises have been found. The plan is to issue guidelines early next year and advise the market what would be expected in terms of additional regulation.

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