Director, General Manager of Sinopec Insurance Limited Li Junhang speaks at the Thematic Breakout Session: Professional risk management services in support of Belt and Road development in Belt and Road Summit 2023 at Hong Kong Convention and Exhibition Centre in Wan Chai on Sept 13, 2023. (ANDY CHONG / CHINA DAILY)

Hong Kong should further leverage its role as an international risk management center and regional investment hub, utilizing its developed insurance industry to provide risk management services for businesses pursuing opportunities in countries and regions involved in the Belt and Road Initiative amid the evolving global landscape, industry leaders said on Wednesday. 

Speaking at the thematic breakout session “Professional risk management services in support of Belt and Road development” of the eighth Belt and Road Summit, Professor of Practice in Finance at the University of Hong Kong Anna Wong said, against a volatile macro environment characterized by rising inflation, high interest rates, supply chain restructuring, geopolitical tensions, and the ramifications of climate change, businesses are confronted with monumental challenges, making it imperative for them to effectively manage these risks to achieve high-quality development.

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Over the decade since the introduction of the BRI in 2013, Hong Kong, leveraging its unique position as an international financial center, has not only provided support as a facilitator for the Chinese mainland’s outbound projects but also offered assistance in financing international projects.

Partner of Oliver Wyman’s Financial Services Jia Jingwei speaks at the Thematic Breakout Session: Professional risk management services in support of Belt and Road development in Belt and Road Summit 2023 at Hong Kong Convention and Exhibition Centre in Wan Chai on Sept 13, 2023. (ANDY CHONG / CHINA DAILY)

However, during this process, the role of the insurance has been underestimated or seen merely as a reactive measure after risks occur, Jia Jingwei, partner of Oliver Wyman’s Financial Services, pointed out. Insurance approaches should be utilized to manage risks and enhance the risk resilience of businesses, he stressed.

Hong Kong Insurance Authority should join hands with relevant companies and industry experts to actively promote legislation

“Risk management services providers in Hong Kong should closely integrate solutions of both finance and insurance to address traditional and emerging risks,” Jia said.

Li Junhang, director and general manager of Sinopec Insurance, echoed Jia’s viewpoint. He said he believes that establishing an internal captive insurance company within a group is one of the means to manage risks, saying that the captive insurer, being familiar with the group’s operations, can provide customized insurance and risk management solutions for all subsidiaries of the group in addition to cost reduction and efficiency improvement.

He added that the ongoing evolution of the global landscape has posed new challenges for captive insurance companies. In light of this, he suggested that businesses could establish mutual insurance organizations to establish a more robust and controlled mechanism for risk diversification.

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Citing that the mainland introduced regulatory measures for mutual insurance organizations in 2015, Li suggested, “Hong Kong Insurance Authority should join hands with relevant companies and industry experts to actively promote legislation, in a bid to provide policy support for establishing mutual insurance organizations in the financial hub, which can enhance Hong Kong-based enterprises’ risk management capabilities and enable them to provide risk management services for Belt and Road projects.”

Head of Global Programs, APAC & Europe AXA XL Jin Shiwei speaks at the Thematic Breakout Session: Professional risk management services in support of Belt and Road development in Belt and Road Summit 2023 at Hong Kong Convention and Exhibition Centre in Wan Chai on Sept 13, 2023. (ANDY CHONG / CHINA DAILY)

Jin Shiwei, head of global programs for APAC and Europe at AXA XL, also shared her perspective on the role Hong Kong plays in risk management for Belt and Road development during the session. She said she believes that as a highly internationalized participant with knowledge and expertise in risk management, Hong Kong serves as a “dear sister” to mainland enterprises, providing “care” and support to some of the less-experienced enterprises in navigating the challenges of going abroad.

Contact the writer at irisli@chinadailyhk.com