Hong Kong asks insurers to move investing roles from Singapore, in push to compete on talent
Over the past year, Hong Kong's insurance regulator has been steering some of the financial hub's biggest life insurers to move investment decision-making functions back to the city following their relocation to Singapore, according to sources familiar with the matter.
The push, led by the Hong Kong Insurance Authority (HKIA), started in early 2024 and is focusing on companies including AIA Group, the sources said, requesting not to be named because the matter is private. The HKIA is a regulator independent of the government, according to its website.
Drawn by incentives such as tax advantages offered by the Monetary Authority of Singapore (MAS), some insurers have in recent years accelerated efforts to establish the city-state as a regional asset management hub, despite making policy sales mainly in Hong Kong, the sources said.
While the move to Singapore was allowed by the HKIA, a number of emerging challenges prompted concern among regulators. Intensifying competition between the two financial hubs for talent and capital, as well as rising concentration risks among asset managers, triggered scrutiny over the relocations, the sources said.
The Hong Kong insurance regulator is able to track the decision-making process when insurers notify them about their outsourcing decisions. Based on a guideline known as GL14, the HKIA can look through detailed arrangements between the insurers and the investment managers who they entrust money with, including the amount and the location.
A NEWSLETTER FOR YOU
Friday, 8.30 am Asean Business
Business insights centering on South-east Asia's fast-growing economies.
Sign Up
Sign Up
In at least one case, the HKIA specifically looked at whether the Hong Kong investment team ultimately decides the mandates, according to one of the sources. The regulator has indicated it wants to create more jobs in the city, including from insurers, fund managers and law firms, the sources said.
The HKIA said that there is no statutory requirement for long-term insurers to maintain their assets in Hong Kong or to exercise their investment-decision making in the city. Nonetheless, all authorised insurers are expected to manage their assets prudently and avoid the building up of concentrated exposure. This will ensure insurers can swiftly settle claims and meet contractual obligations for the protection of policyholders, the regulator said.
The HKIA said that it will also pay due regard to potential legal and operational constraints on the fungibility of capital across different jurisdictions.
Singapore presence
In the case of AIA, it established an asset management company under a structure known as the variable capital company in Singapore in 2021. The insurer operates in 18 Asian markets with businesses ranging from life insurance to pensions.
AIA has since been moving assets in private equity and global stock strategies from Hong Kong to Singapore, according to the sources. Hong Kong's management arm is looking after mostly pension money raised from the city, the sources added.
With 198 employees, Singapore-based AIA Investment Management Private (AIAIM) managed US$139 billion as at the end of 2024. AIA Group's total invested assets stood at about US$255 billion in the same period.
AIA's Hong Kong-based senior group investment executives are in charge of setting up asset allocation principles and monitoring various managers, including AIAIM, but the fund selection decisions are in the hands of the Singapore investment team, the sources said.
General partners and asset managers mostly talk to the Singapore team for mandates, according to sources familiar.
AIA has said that it intends to keep its headquarters in Hong Kong. Its outgoing non-executive chairman Edmund Tse said in 2024 that the company had no intentions to relocate. AIA declined to comment.
The number of companies with regional headquarters in Hong Kong dropped from 1,457 in 2021 to 1,410 in 2024, according to government data.
One Hong Kong-based insurer was recently guided by people at the HKIA not to move assets into Singapore VCC structures, one source said.
Assets under management across the city's asset and wealth management industry rose 13 per cent to HK$35.1 trillion (S$5.8 trillion), according to a Securities and Futures Commission annual survey with some 40 insurance firms.
The MAS said in a response to Bloomberg News that Singapore's asset management industry has seen healthy growth from diversified sources outside the city-state, including North America, Europe and Asia. The VCC structure offers investment funds greater operational flexibility and saves costs, it added. BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
9 hours ago
- Business Times
Cathay Pacific warns of declining fares and cargo uncertainty, shares fall
[HONG KONG] Cathay Pacific Airways warned on Wednesday (Aug 6) of declining airfares, challenges at its budget carrier and uncertain cargo market conditions, sending its shares down almost 10 per cent to a one-month low. Hong Kong's flagship airline also said it had ordered 14 more Boeing 777-9 wide-body jets as it expands long-haul routes, taking its total orders for the model to 35 with options for another seven. Cathay's first-half profit rose 1 per cent to HK$3.65 billion (S$597.7 million) on a strong jump in passenger numbers, lower fuel prices and a steady cargo performance. But passenger yields, a proxy for airfares, fell 12.3 per cent at its main brand and 21.6 per cent at low-cost carrier HK Express, as Cathay and its rivals added capacity. 'HK Express continues to face short-term challenges,' chairman Patrick Healy said after the budget airline posted a first-half loss of HK$524 million, before net finance charges and taxation. Healy said Cathay was taking a long-term view and expected HK Express to become profitable. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Cathay shares ended 9.7 per cent lower at their lowest close since Jul 4, having seen their biggest one-day percentage drop since January 2021. The benchmark Hang Seng Index gained 0.3 per cent. 'The results were in line with expectations but the performance from the budget airline segment was not impressive,' said Steven Leung, a sales director in Hong Kong at brokerage UOB Kay Hian. Yields at Asia's airlines are coming down from post-pandemic record highs as carriers add capacity, intensifying competition. Asian peer Singapore Airlines said last week its yields declined 3.5 per cent in the April to June quarter, while those at its low-cost carrier Scoot fell 4.7 per cent. Cathay's chief commercial officer Lavinia Lau said a rise in long-haul flights and transit passengers was also pushing yields lower. North America yields took the biggest hit, falling by 17.5 per cent, and pressure on those routes could continue as Cathay added 50 per cent more US-bound capacity this summer and US visa issues for Chinese nationals may impact traveller numbers, Lau said. Bookings for Japan have not yet recovered to normal levels since a substantial drop-off in June amid rumours an earthquake would strike the country, CEO Ronald Lam said. Based at the world's busiest cargo airport, Cathay is one of Asia's largest cargo carriers and has benefitted from rising volumes of e-commerce out of China. Cathay said its cargo business showed resilience despite uncertainty caused by changes to US tariffs this year, in particular the cancellation of a duty-free exemption for low-value packages from China. The cargo division's half-year revenue rose 2.2 per cent, while yields fell 3.4 per cent. Cathay's order for 14 more 777-9 planes with GE engines exercised options secured in a 2013 order for 21 of the jets. It expects delivery by 2034. The long-delayed 777-9, Boeing's latest version of its 777, has not yet been certified. The model is undergoing flight testing and Boeing hopes to start deliveries next year. Cathay said it expects its first 777-9 delivery in 2027. REUTERS
Straits Times
11 hours ago
- Straits Times
India's Modi to visit China for first time in 7 years as tensions with US rise
Sign up now: Get ST's newsletters delivered to your inbox FILE PHOTO: A worker makes final checks on jeans pants before packaging in a garment manufacturing unit on the outskirts of Ahmedabad, India, August 5, 2025. REUTERS/Amit Dave/File Photo NEW DELHI - Indian Prime Minister Narendra Modi will visit China for the first time in over seven years, a government source said on Wednesday, in a further sign of a diplomatic thaw with Beijing as tensions with the United States rise. Modi will go to China for a summit of the multilateral Shanghai Cooperation Organisation that begins on Aug. 31, the government source, with direct knowledge of the matter, told Reuters. India's foreign ministry did not immediately respond to a request for comment. His trip will come at a time when India's relationship with the U.S. faces its most serious crisis in years after President Donald Trump imposed the highest tariffs among Asian peers on goods imported from India, and has threatened an unspecified further penalty for New Delhi's purchases of Russian oil. Modi's visit to the Chinese city of Tianjin for the summit of the SCO, a Eurasian political and security grouping that includes Russia, will be his first since June 2018. Subsequently, Sino-Indian ties deteriorated sharply after a military clash along their disputed Himalayan border in 2020. Modi and Chinese President Xi Jinping held talks on the sidelines of a BRICS summit in Russia in October that led to a thaw. The giant Asian neighbours are now slowly defusing tensions that have hampered business relations and travel between the two countries. Trump has threatened to charge an additional 10% tariff on imports from members - which include India - of the BRICS group of major emerging economies for "aligning themselves with Anti-American policies." Trump said on Wednesday his administration would decide on the penalty for buying Russian oil after the outcome of U.S. efforts to seek a last-minute breakthrough that would bring about a ceasefire in the war in Ukraine. Trump's top diplomatic envoy Steve Witkoff is in Moscow, two days before the expiry of a deadline the president set for Russia to agree to peace in Ukraine or face new sanctions. Meanwhile, India's National Security Adviser Ajit Doval is in Russia on a scheduled visit and is expected to discuss India's purchases of Russian oil in the wake of Trump's pressure on India to stop buying Russian crude, according to another government source, who also did not want to be named. Doval is likely to address India's defence cooperation with Russia, including obtaining faster access to pending exports to India of Moscow's S400 air defence system, and a possible visit by President Vladimir Putin to India. Doval's trip will be followed by Foreign Minister Subrahmanyam Jaishankar in the weeks to come. EXPORT IMPACT U.S. and Indian officials told Reuters a mix of political misjudgement, missed signals and bitterness scuttled trade deal negotiations between the world's biggest and fifth-largest economies, whose bilateral trade is worth over $190 billion. India expects Trump's crackdown could cost it a competitive advantage in about $64 billion worth of goods sent to the U.S. that account for 80% of its total exports, four separate sources told Reuters, citing an internal government assessment. However, the relatively low share of exports in India's $4 trillion economy is expected to limit the direct impact on economic growth. On Wednesday, the Reserve Bank of India left its GDP growth forecast for the current April-March financial year unchanged at 6.5% and held rates steady despite the tariff uncertainties. India's government assessment report has assumed a 10% penalty for buying Russian oil, which would take the total U.S. tariff to 35%, the sources said. India's trade ministry did not immediately respond to a request for comment. The internal assessment report is the government's initial estimate and will change as the quantum of tariffs imposed by Trump becomes clear, all four sources said. India exported goods estimated at around $81 billion in 2024 to the U.S. REUTERS
Straits Times
17 hours ago
- Straits Times
Hong Kong asks insurers to return investing roles from Singapore, sources say
Sign up now: Get ST's newsletters delivered to your inbox Life insurers have become the latest target in Hong Kong's efforts to compete with Singapore in retaining talent and capital. HONG KONG - Life insurers have become the latest target in Hong Kong's efforts to compete with Singapore in retaining talent and capital. Over the past year, Hong Kong's insurance regulator has been steering some of the financial hub's biggest life insurers to move investment decision-making functions back to the city following their relocation to Singapore, according to people familiar with the matter. The push, led by the Hong Kong Insurance Authority (hkia), started in early 2024 and is focusing on companies including AIA Group, the people said. The HKIA is a regulator independent of the government, according to its website. Drawn by incentives such as tax advantages offered by the Monetary Authority of Singapore (mas), some insurers have in recent years accelerated efforts to establish the city-state as a regional asset management hub, despite making policy sales mainly in Hong Kong, the people said. While the move to Singapore was allowed by the HKIA, a number of emerging challenges prompted concern among regulators. Intensifying competition between the two financial hubs for talent and capital - as well as rising concentration risks among asset managers - triggered scrutiny over the relocations, the people said. The Hong Kong insurance regulator is able to track the decision-making process when insurers notify them about their outsourcing decisions. Based on a guideline known as GL14, the HKIA can look through detailed arrangements between the insurers and the investment managers who they entrust money with, including the amount and the location. In at least one case, the HKIA specifically looked at whether the Hong Kong investment team ultimately decides the mandates, according to one of the people. The regulator has indicated it wants to create more jobs in the city, including from insurers, fund managers and law firms, the people said. Top stories Swipe. Select. Stay informed. Singapore Hidden vapes and where to find them: Inside ICA's clampdown at land checkpoints Singapore East-West Line MRT service resumes after delays lasting around 5 hours; track point fault fixed Opinion Internships open doors but only if students can first find the key World Meta says it's working to thwart WhatsApp scammers Singapore Jail for 2 friends who swopped seats in car to try and evade justice after drinking alcohol Singapore Sorting recyclables by material could boost low domestic recycling rate: Observers Singapore SM Lee receives Australia's highest civilian honour for advancing bilateral ties Asia Trump's sharp India criticism corners Modi as rift deepens The HKIA said there is no statutory requirement for long-term insurers to maintain their assets in Hong Kong or to exercise their investment-decision making in the city. Nonetheless, all authorizSd insurers are expected to manage their assets prudently and avoid the building up of concentrated exposure. This will ensure insurers can swiftly settle claims and meet contractual obligations for the protection of policyholders, the regulator said. The HKIA said it will also pay due regard to potential legal and operational constraints on fungibility of capital across different jurisdictions. Singapore presence In the case of AIA, it established an asset management company under a structure known as the variable capital company in Singapore in 2021. The insurer operates in 18 Asian markets with businesses ranging from life insurance to pensions. AIA has since been moving assets in private equity and global stock strategies from Hong Kong to Singapore, according to the people. Hong Kong's management arm is looking after mostly pension money raised from the city, the people added. With 198 employees, Singapore-based AIA Investment Management Private Ltd. (AIAIM) managed US$139 billion (S$179 billion) as of end 2024. AIA Group's total invested assets stood at about US$255 billion in the same period. AIA's Hong Kong-based senior group investment executives are in charge of setting up asset allocation principles and monitoring various managers, including AIAIM, but the fund selection decisions are in the hands of the Singapore investment team, the people said. AIA declined to comment. MAS said in a response to Bloomberg News that Singapore's asset management industry has seen healthy growth from diversified sources outside the city-state, including North America, Europe and Asia. The VCC structure offers investment funds greater operational flexibility and saves costs, it added. The number of companies with regional headquarters in Hong Kong dropped from 1,457 in 2021 to 1,410 in 2024, according to government data. One Hong Kong-based insurer was recently guided by people at the HKIA not to move assets into Singapore VCC structures, one person said. Assets under management across Hong Kong's asset and wealth management industry rose 13 per cent to HK$35.1 trillion (S$5.8 trillion), according to a Securities and Futures Commission annual survey with some 40 insurance firms. BLOOMBERG
