As insurance-linked securities (ILS) continues to gain momentum in Hong Kong, Stephen Yiu, JP Chairman of the Hong Kong Insurance Authority (IA) believes that the market is a “blue ocean” for Hong Kong’s insurance brokers, and an opportunity not to be missed.
Yiu, speaking at the CIB Annual Conference, explained that increasingly frequent and severe natural catastrophic events have led to substantial economic losses globally, with Asia suffering the highest protection gap.
“According to reports published by different reinsurers, about 40% of the global estimated economic losses from natural catastrophes were insured. The figure did not look too worrying on the surface. However, when we look at Asia alone, the coverage ratio dropped drastically to 15%, i.e. the protection gap amounts to 85%. More importantly, the natural catastrophe protection gap in our home country exceeded 90% in the past decade,” Yiu explained.
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