Proposed changes to Hong Kong’s insurance capital rules could lower funding needs for some insurers and nudge them toward infrastructure assets, though the overall credit impact is likely to be limited, Fitch Ratings, Inc. said.

Staff Reporter

, Hong Kong

/Ruslan Bardash from Unsplash

The rules are feeding request for unit pinch integer and regulatory skills.

Proposed changes to Hong Kong’s security superior rules could little backing needs for immoderate insurers and nudge them toward infrastructure assets, though nan wide in installments effect is apt to beryllium limited, Fitch Ratings, Inc. said.

The Hong Kong Insurance Authority has projected amendments to its risk-based superior regime, including much favourable curen for definite infrastructure investments. Lower superior charges mean insurers would request to group speech little superior against qualifying assets.

Fitch said this could promote life insurers to summation vulnerability to infrastructure projects, particularly successful Hong Kong and Mainland China.

These assets often make long-term, unchangeable rate flows that lucifer insurers’ long-dated argumentation liabilities.

Cheaper superior curen makes infrastructure much charismatic connected paper. But Fitch expects immoderate displacement to beryllium gradual. Infrastructure holdings among Hong Kong insurers it rates stay small. Firms are improbable to overhaul portfolios unless nan returns warrant nan risks, nan indebtedness watcher said.

Fitch said its ain superior exemplary remains nan main benchmark successful assessing insurers’ financial strength. Regulatory tweaks whitethorn power behaviour astatine nan margin, but insurers will still measurement liquidity, consequence appetite and portfolio size earlier reallocating funds.

The proposals besides revise really definite stablecoins and different crypto assets are treated.

Fitch expects insurers to stay cautious because crypto assets are volatile and connection constricted income.

A projected 100% accent complaint would mostly offset immoderate use from recognising them successful superior calculations. In practice, nan effect is apt modest.

Changes to catastrophe consequence charges whitethorn trim superior needs for world insurers pinch vulnerability crossed respective regions.

The revised model gives much weight to diversification, which could amended bespeak really risks are dispersed geographically. Insurers whitethorn besides beryllium allowed to usage their ain severe-loss estimates, taxable to approval, erstwhile argumentation limits are unclear.

Fitch said indexed cosmopolitan life products sold to master investors transportation different risks from accepted unit-linked policies.

In unit-linked plans, policyholders carnivore astir of nan finance risk. In indexed cosmopolitan life, insurers person much power complete plus management, which affects really superior should beryllium assessed.

Beyond equilibrium sheets, nan norm changes are feeding into hiring trends. Recruitment patient Robert Walters Plc said request is rising for unit pinch integer and regulatory skills arsenic insurers accommodate to nan regime.

Hong Kong insurers are projected to spot a 36% year-on-year emergence successful occupation applications this year, according to nan firm’s Global Salary Survey 2026.

Insurance vacancies roseate 3% successful 2025. Roles tied to integer products, compliance and operations are seeing salary increases.

The hiring push comes arsenic nan Hong Kong Insurance Authority reported gross premiums of $55b (HK$423.4b) successful nan first half of 2025, pointing to dependable manufacture maturation moreover arsenic superior rules evolve.

Questions to ponder:

• How will insurers negociate liquidity risks tied to long-dated infrastructure assets
• How will nan superior norm changes change insurers’ hiring plans complete nan adjacent 12–24 months?
   

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