Senior executives at the two life insurers shared how they and peers should adapt their investment portfolios ahead of Hong Kong's new risk-based capital regime.
The US-based life insurer has said it might leave the Taiwan market. If it does so, it will follow in the wake of other foreign players such as ING and AIG.
The preferential treatment that reduces the cost of capital for Chinese insurers when they buy reinsurance in Hong Kong could change once the city adopts a new RBC regime.
The FSC exclusively told AsianInvestor that it intends to divide the capital structure of local insurers into two tiers. Analysts believe this will make them more prudent investors.
Paul Carrett says he supports the use of derivatives to hedge risks and execute promptly and hopes the new RBC regime doesn’t limit the investment opportunities available to insurers.
Hong Kong's incoming solvency rules for insurers will have a big impact on their fixed income portfolios just as they will on their higher-risk asset holdings, warn industry experts.