FSTB welcomes inaugural issuance of "sidecar" insurance-linked securities in Hong Kong
The Financial Services and the Treasury Bureau welcomed an inaugural issuance of insurance-linked securities (ILS) in the form of "sidecar" by the PICC Property and Casualty Company Limited (PICC P&C) in Hong Kong, with a size of US$12 million (equivalent to about HK$94 million), providing quota share reinsurance protection for offshore windfarm property insurance businesses on the Chinese Mainland.
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "To support the National 15th Five-Year Plan, which identifies the enhancement of the catastrophe risk protection framework and risk-pooling mechanisms as a key task, the Hong Kong's First Five-Year Plan published last month proposed fully leveraging Hong Kong's competitive edge in the international insurance, reinsurance, and capital markets to advance the synergised development of traditional insurance and non-traditional risk management tools. This will enable us to unleash the synergy effect of multilayered risk transfer and pooling mechanisms through ILS and other tools, thus consolidating our strategic role as a regional and global catastrophe and specialty risk management hub.
"We welcome PICC P&C’s issuance of Hong Kong's first 'sidecar'. This demonstrates Hong Kong's combined strengths in reinsurance and capital markets. The issuance marks the significant progress gained for Hong Kong's insurance industry and capital markets in risk transfer and the use of alternative capital under the support of our country. It will further enhance the market's capacity to manage catastrophe and other specialty risks, and consolidate Hong Kong's position as an international risk management centre. As announced by the Chief Executive in the 2026 Policy Address, we will continue to work with the Insurance Authority in promoting ILS, narrowing the protection gap for catastrophe and other specialty risk, and reviewing investor restrictions to invigorate the ILS fund trading market. Meanwhile, we will explore legislative amendments to introduce a 'protected cell company' structure, which will help further reduce the costs of issuing ILS, thereby attracting more companies of different scales to choose Hong Kong as a base for managing group or regional risks."
Mr Hui added, "ILS and captive insurance, which we have long been promoting, can provide enterprises 'going global' with diversified means of spreading and managing risks. We expect this combination of financial policy measures will allow enterprises to leverage Hong Kong as a safe haven for 'going global' with greater ease of mind."
Since the establishment of the bespoke regulatory regime for ILS and the launch of the pilot grant scheme in 2021, seven catastrophe bonds and one "sidecar" have been issued in Hong Kong to date, with a total issuance amount of about HK$6.3 billion, securing protection against catastrophe and other specialty risks on the Chinese Mainland and overseas. In September 2025, the National Financial Regulatory Administration issued the "Notification on the Issuance of Insurance-linked Securities on Hong Kong Market by Domestic Chinese Insurers", which supports interested Mainland insurers to issue "sidecar" ILS in Hong Kong, with a view to diversifying the channels for dispersing catastrophe insurance risks.
A "sidecar" is an ILS structure through which investors provide capital to support a specific insurance or reinsurance portfolio. Generally speaking, a "sidecar" is typically capitalised through equity or a debt instrument (such as preference shares or participating notes), and enables investors to share, on a quota-share basis with the sponsor the premiums, claims and underwriting results of a designated insurance or reinsurance portfolio.
Source: AI-found images
Speech by SCED at HKGCC Silver Economy Summit
Following is the speech by the Secretary for Commerce and Economic Development, Mr Algernon Yau, at the Hong Kong General Chamber of Commerce (HKGCC) Silver Economy Summit today (October 14):
Mr Douglas Woo (Vice Chairman of the HKGCC), Mr Zhou (Deputy Director-General of the Economic Affairs Department and Head of the Commercial Office of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region, Mr Zhou Qiang), distinguished speakers and guests, ladies and gentlemen,
Good morning. It gives me great pleasure to join you at the HKGCC Silver Economy Summit. I would like to thank the HKGCC for organising this timely Summit and bringing together leaders from business, finance, healthcare, technology, professional services and other sectors. The diversity of expertise represented here demonstrates that the silver economy offers opportunities across a wide range of sectors.
Hong Kong is entering a new era of longevity. As at mid-2025, there were nearly 1.8 million persons aged 65 and above in Hong Kong, accounting for almost one quarter of our population. By 2046, this figure is projected to rise to 2.74 million, or 36 per cent of the population. This demographic shift will drive growing demand for products and services that support healthier, more independent and more fulfilling later lives.
The silver economy is about much more than elderly care. It covers different aspects of daily life, from food, retail and travel to healthcare, financial planning, lifestyle and technology. It is about recognising the diverse needs and preferences of older persons, and providing them with more suitable, accessible and quality choices. These needs also create new business opportunities, encouraging enterprises to develop age-friendly products and services, meet growing demand and strengthen their competitiveness while bringing economic and social benefits.
The Government has established the Working Group on Promoting Silver Economy and rolled out 30 measures under five areas of work since May 2025, including boosting "silver consumption", developing "silver industry", promoting "quality assurance of silver products", enhancing "silver financial and security arrangements", and unleashing "silver productivity". The two panel discussions today reflect these priorities and highlight the diverse opportunities presented by the silver economy.
These measures cover various policy areas and are being implemented by the relevant policy bureaux. My Bureau has been working closely with the industry to promote "silver consumption" and quality assurance, with encouraging progress. We have been encouraging businesses to incorporate silver economy elements into major exhibitions and to introduce products and services tailored to the needs of older persons. For example, more restaurant chains and food companies are now offering soft meals for older persons with swallowing difficulties. We are also working with the Hong Kong Council of Social Service and the Hong Kong Trade Development Council to make more senior-friendly products available in physical stores and e-commerce platforms.
Quality assurance is equally important in building consumer confidence and supporting the sustainable development of the silver economy. The Hong Kong Registration – Silver-friendly Series launched by the Hong Kong Quality Assurance Agency has received more than 160 applications covering venues, products and services across sectors. Meanwhile, the Guangdong-Hong Kong-Macao Greater Bay Area Standard for care food and Hong Kong's first Care Food Product Certification Mark Scheme are helping businesses build trust, improve their offerings and capture opportunities in the silver market.
Beyond promoting the silver economy, the Government is taking a broader and more comprehensive approach to addressing the challenges and opportunities arising from an ageing population. Last year, we set up the Working Group on Ageing Society Strategies to review the policies and measures of various bureaux. The Working Group released its report last month, which sets out 73 measures across 11 areas. These include developing the silver economy to meet the changing needs of older persons and create new business opportunities.
Among other initiatives, we will collaborate with the industry and relevant organisations to explore extending silver certification to a wider range of age-friendly products and services. In particular, we will study the development of standards for mobility aids, such as walking sticks, wheelchairs and exoskeleton systems, and explore the possibility of incorporating these standards into the Guangdong-Hong Kong-Macao Greater Bay Area Standards framework.
We will also continue to boost "silver consumption" by encouraging the industry to better incorporate the needs and preferences of the elderly into its business strategies and planning. Our efforts include staging more silver economy exhibitions, offering retail and catering concessions to the elderly, encouraging e-commerce platforms to diversify their range of silver products and facilitate online shopping, and expanding the availability of silver products in restaurants and other retail outlets.
Ladies and gentlemen, the silver economy is about creating better choices and better lives for older persons. It is also about fostering innovation, unlocking new market opportunities and creating fresh momentum for Hong Kong's economic development. I am confident that, by bringing together the strengths of the business community, professional sectors and different partners, we can develop more quality products and services, capture the opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area, the Mainland and beyond, and make Hong Kong a more age-friendly and vibrant city.
I wish the HKGCC Silver Economy Summit 2026 every success, and all participants a fruitful and rewarding morning. Thank you.
Source: AI-found images
