Staff Reporter
Published:
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The $12m arrangement covers property insurance for offshore wind farms on the mainland.
The Financial Services and the Treasury Bureau of Hong Kong welcomed the first issuance of an insurance-linked securities (ILS) "sidecar" by PICC Property and Casualty Company Limited on Wednesday.
The $12m transaction provides quota-share reinsurance protection for offshore wind farm property insurance business on the Chinese mainland.
"This move will enable Hong Kong to unleash the synergy effect of multilayered risk transfer and pooling mechanisms through ILS and other tools, thus consolidating the city's strategic role as a regional and global catastrophe and specialty risk management hub," said Christopher Hui, Secretary for Financial Services and the Treasury.
A sidecar is an ILS vehicle that allows investors to provide capital to support a specific insurance or reinsurance portfolio.
Capitalised through equity or debt instruments—such as preference shares or participating notes—it enables investors to share the premiums, claims, and underwriting results of a designated portfolio on a quota-share basis alongside the sponsor.
Since Hong Kong established its dedicated ILS regulatory framework and pilot grant scheme in 2021, the market has hosted seven catastrophe bond issuances and one sidecar.
Total issuance volume has reached approximately $802m, covering risks on the Chinese mainland and internationally.
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