Faced with drastic regulatory changes, Hong Kong insurers that want to improve their solvency ratios should optimise their portfolios and review asset allocations, say experts.
Hong Kong's looming risk-based capital regime is set to pose an even bigger investment challenge for local insurance firms than Solvency II has done in Europe.
Bangkok-based life insurance firms are lobbying to be allowed to invest in new asset classes, such as foreign infrastructure and private debt, to help boost returns.
The country’s insurers are awaiting final new risk-based capital rules before making big portfolio changes. They are concerned about potentially high charges for equities.
Senior executives at the Canadian insurer’s Malaysian and Philippine units explain how risk capital charges will further exacerbate the investment challenges they face.
While Southeast Asian nations have forged ahead with new risk-based capital rules, other countries, such as Hong Kong and Korea, are seen to be lagging.