Speech by Acting FS at opening ceremony of 28th Pacific Insurance Conference
Following is the speech by the Acting Financial Secretary, Mr Edward Yau, at the opening ceremony of the 28th Pacific Insurance Conference today (November 20):
Lennard (Organising Committee Chairman, Regional Chief Executive Officer of FTLife Insurance Company, Mr Lennard Yong), Gary (28th Pacific Insurance Conference Chairman, President and Chief Executive Officer of CMC Global, Mr Gary Comerford), John (Chief Executive Officer of the Insurance Authority, Mr John Leung), ladies and gentlemen,
Good morning. It is a pleasure to join you today for the opening ceremony of the biennial Pacific Insurance Conference. This is the third time Hong Kong has hosted your prestigious Conference since it got going, back in 1963.
A glance at your ambitious programme over the next three days, and at the Conference theme - "Our World from the Outside In" - underscores the "disruption" element of technology in the insurance industry. It emphasises, too, this Conference's determination to tackle the issues, the challenges, it raises.
Indeed, you have invited, to this Conference, a smart cross-section of technology disruptors - those who would "seriously alter or even destroy the structure of" the insurance industry, to paraphrase Oxford's take on the word "disrupt". But we all know in modern days, no one can be spared from changes, and disruptive technology does not only alter or destroy. It brings opportunities as well.
More likely, you are here to help the industry find the way forward in this 21st century of disruption. A big task, that, as a recent global CEO survey noted, "insurance is the second most disrupted sector in the global economy, behind only entertainment and media", adding, and I quote, "The disruption reflects the speed with which the social, technological, environmental, economic and political changes we have been anticipating are becoming a reality within the insurance industry."
So, I believe you have a good deal to reflect and discuss over these next three days, on the way forward for this fast changing industry.
Allow me, over the next few moments, to focus on the Hong Kong industry, how it's faring, where it's heading, and what the Hong Kong Government is doing to work with your industry in facing all the changes and challenges.
First of all, my congratulations to our local insurance industry for a banner year in 2016. Yes, gross premiums last year increased by more than four-fold, to over HK$450 billion, US$58 billion, which is remarkable.
As good as those numbers are, I understand the industry is also looking for a regulatory system that is commensurate with the long-term and healthy development of the industry. For this purpose, we have seen the establishment in June of the Insurance Authority, which is the independent and credible regulator that seeks to protect policyholders through effective regulation, as well as a regulatory regime to promote the global competitiveness and sustainability of the Hong Kong insurance industry.
One distinctive mission of the Authority is to embrace technology and explore new market opportunities available to the industry.
The Authority is now actively engaging with the industry through the Future Task Force and other forums, looking for ways to boost its development.
To remain competitive in the rapidly changing market, we need to "Look Beyond" the horizon. That, as you may be aware, was the theme of this year's International Association of Insurance Supervisors conference, held earlier this month in Kuala Lumpur.
Looking beyond today's insurance market, working to piece together the shape of tomorrow's industry, is the mission of the Future Task Force, under the Insurance Authority's leadership.
The Conference today is looking to do much the same, guided by your "Outside-In" approach, with the firm belief that customer value creation, customer orientation and customer experience remain core and critical to making changes and achieving successes.
While customer service remains key to the customer-centric insurance industry, I believe technology application, or Insurtech, will be the catalyst to the development of personalised insurance solutions, especially in meeting the risk-management needs of individuals.
With the help of artificial intelligence and data analytics, insurers are better equipped to develop and enhance the products and services they offer, and to make appropriate recommendations for each and different risk scenario.
The Insurtech aided services, if delivered at the right time, in the right way, at the right price, would surely help build customer engagement and retention. But the development and application of Insurtech must be pursued in close collaboration with professionals in the industry as well as those technology providers.
Earlier this year, the Insurance Authority launched the Insurtech Sandbox. It enables insurers and financial technology companies to obtain market data and collect user feedback on their products and services before their formal market launch.
I am happy to note that the Insurance Authority has put together a dedicated Insurtech Facilitation Team to exchange knowledge and ideas among insurers, Fintech companies and start-ups.
The Government attaches importance to the application of technology in our major and fast growing industries. A high level Steering Committee on Innovation and Technology, chaired by the Chief Executive, has been established to examine, and fast-forward, innovation and technology measures. We look forward to your industry in identifying areas of needs and potential for development in this upcoming exercise.
Let us not lose sight of the Government's commitment in our HK$2 billion Innovation and Technology Venture Fund launched in September to stimulate private investment in Fintech and other start-ups. It will also increase deal flow, as the Government invests with private venture capital funds on a matching basis.
And there are more inducements on the way to boost innovation and technology in Hong Kong - including tax deductions for research and development (R&D) expenditures. As outlined in the Policy Address, we will double domestic expenditure on R&D, to about HK$45 billion a year. That is expected to account for about 1.5 per cent of our GDP by 2022, doubling the current level.
Ladies and gentlemen, an ancient Greek philosopher once said that "Change is the only constant." There is a similar Chinese saying: "Standing still means falling behind."
In short, whether East or West, in the face of change, we must move forward if we wish to stay ahead.
To that, I can only add that Hong Kong is not one for standing still - in insurance or any other business or industry, pursuit or occupation. Never has been and never will be.
I wish you all a rewarding result at the Conference. I look forward to seeing you all in Hong Kong.
Ends/Monday, November 20, 2017