HSBC Group has established Wayfoong (Asia) Limited as a captive insurer, making it the first multinational enterprise (MNE) to form such an entity within Hong Kong.
The authorisation, granted by the Hong Kong Insurance Authority (IA), reinforces the city’s efforts to position itself as a leading location for global risk management and insurance solutions.
Captive insurance vehicles are commonly used by large corporations to underwrite their own risks, allowing them to streamline claims handling, retain profits within the organisation, and tailor coverage to specific operational needs.
The creation of Wayfoong (Asia) marks a milestone in Hong Kong’s regulatory support for such structures.
Clement Cheung, the IA’s chief executive officer, said the development signals growing confidence among international corporations in using Hong Kong as a base for risk operations.
“This decision taken by the HSBC Group reflects our growing attractiveness and promising potential as a key captive domicile, leveraging the unique advantages of Hong Kong to facilitate multinational enterprises in managing their global operations. This is also a fine example of how the IA strives and succeeds in elevating the prominence of Hong Kong as an international financial centre and promoting balanced development of different segments of the insurance industry,” he said.
Financial Secretary for Financial Services and the Treasury Christopher Hui described the move as consistent with the city’s long-term strategy to become a regional hub for insurance and reinsurance services.
“Hong Kong has [a] strong foundation in investment and trade, making it an ideal location for global enterprises to access insurance, reinsurance, and risk management services, as well as establish captive insurers. The decision of HSBC to set up a captive insurer here underscores its solid confidence and firm commitment in our city,” he said.
He noted that Hong Kong’s legal and financial infrastructure makes the city a practical choice for firms establishing captives. The government has introduced initiatives like a 50% tax concession to support this segment.
“Given the current global situation where risks take on new dimensions, we will continuously revisit our policy tools with a view to attracting more multinational enterprises from various regions and of multiple scales to choose Hong Kong as the base of their captive insurers,” Hui said.
The IA continues to introduce regulatory enhancements, including the Risk-Based Capital (RBC) regime, launched on July 1, 2024. The new framework aims to align capital requirements with insurers’ risk profiles, furthering Hong Kong’s regulatory alignment with global best practices.
IA chairman Stephen Yiu cited regulatory progress and market development as contributing to the city’s elevated global profile.
“The Insurance Authority (IA) takes pride in this achievement,” he said.
Recent IA data show strong performance in both long-term and general insurance segments.
Preliminary figures for 2024 indicate that total gross premiums reached HK$637.8 billion. The long-term segment alone contributed HK$219.8 billion in new business premiums, representing a 21.4% increase compared to 2023.
Non-linked individual policies made up the majority, with HK$182.4 billion in participating products and HK$25.7 billion from other categories. Linked policy sales held steady at HK$11.2 billion.
Cross-border business with Mainland China continues to play a key role. Sales to Mainland Chinese visitors accounted for HK$62.8 billion in new premiums – 28.6% of the annual total. Most policies purchased were whole life, critical illness, or medical insurance.
Revenue from in-force policies rose 11.4% to HK$537.4 billion, while claims and policyholder benefits paid during the year totalled HK$352.5 billion.
The general insurance sector reported HK$100.5 billion in gross premiums and HK$69.7 billion in net premiums. Direct business generated HK$51.4 billion, with accident and health (HK$22.8 billion), liability (HK$12.1 billion), property damage (HK$6.2 billion), and motor insurance (HK$5.4 billion) among the major lines. Overall operating profit was HK$8.1 billion, of which HK$3.3 billion came from underwriting gains.
Reinsurance inward premiums reached HK$49 billion, with net premiums at HK$33.9 billion. These generated HK$2.1 billion in underwriting profit, primarily from property damage reinsurance.
