Hong Kong’s maritime insurance sector is outperforming broader non-life market growth, driven largely by strength in protection and indemnity (P&I) insurance, according to Insurance Authority’s Messrs MM Lee and Ocean Chiu during a recent discussion on the city’s maritime ambitions.
Hong Kong envisions itself as an international maritime centre and that vision starts from the top and cascades throughout the industry.
Insurance Authority (IA) Executive Director for General Business MM Lee said the Hong Kong maritime ecosystem is built around four key pillars: ship registry, legal services, insurance and finance. Since we are discussing insurance today, it is important to recognise that all four pillars must work together cohesively.
In terms of insurance, Hong Kong may not be as large as some other jurisdictions, but what is significant is the proportion of marine business within the overall insurance industry, Mr Lee said.
In Hong Kong, marine insurance (including goods in transit) represents around 6.5% of the non-life insurance market. That already demonstrates the emphasis Hong Kong places on marine insurance and its role within the wider maritime sector.
Marine insurance can generally be divided into three main segments: hull insurance, liability insurance (including P&I, which covers third-party risks) and cargo insurance.
IA’s Associate Director for General Business Ocean Chiu added to the discussion, noting that in the past, a significant portion of cargo shipments moving between China and the rest of the world transited through Hong Kong.
However, Mr Chiu said as shipping infrastructure and maritime centres across mainland China have expanded, cargo traffic no longer necessarily routes through Hong Kong.
Despite this trend, Hong Kong’s ship insurance segment, particularly P&I insurance, has continued to grow strongly. According to preliminary observations of the 2025 figures, the city’s ship insurance business is expanding at a pace faster than the broader non-life insurance market. (See Table 1).
A global trading hub
Mr Lee said Hong Kong’s strength as a maritime centre comes from its role as a global trading hub rather than a manufacturing base.
“While Hong Kong may have had a stronger manufacturing sector decades ago, its economy today is driven by the movement of capital, goods, and other tangible and intangible assets,” he said.
“As long as there is trade, Hong Kong’s advantage as a maritime centre remains,” Mr Lee said, emphasising that the city should not be viewed in isolation but as part of China’s broader economic and shipping ecosystem.
Mr Lee also said that multiple shipping centres across China are growing rapidly due to the country’s massive trade volumes. Within the Greater Bay Area alone, emerging hubs such as Nansha are developing alongside Hong Kong, with each city playing a complementary role in the wider maritime network.
“The city’s edge in cargo-related business is not like the old days as trade routes evolve. Increasingly, shipments, including electric vehicle cargoes, are being transported directly to overseas destinations without passing through Hong Kong. That said, Hong Kong’s competitive advantage remains strongest in marine hull and liability insurance,” Mr Lee said.
Developing captives
In view of the evolving landscape, Mr Chiu said significant time and effort had been invested in preparing for the next upswing in business, particularly through the development of captive insurance strategies.
“While electric vehicles and oil cargo may no longer pass directly through Hong Kong’s ports, Hong Kong still plays a key role in insuring such trade flows through captive insurance structures,” he said.
He explained that Hong Kong currently hosts seven captives, including those established by two major Chinese mainland oil companies, Sinopec and CNOOC.
Much of the oil cargo insurance linked to these firms is arranged through Hong Kong, despite the shipments themselves not necessarily transiting the city.
He described this as a niche strength for Hong Kong, particularly in helping mainland enterprises facilitate international trade and cargo movement through the city’s insurance and financial infrastructure.
Improving maritime safety
Mr Lee said advances in shipping technology and risk management have significantly improved maritime safety, reducing the frequency of major incidents such as ship-to-ship collisions.
“While accidents still occur occasionally, increasing automation and the development of autonomous vessel technology could see the shipping industry adopt autopilot systems even before the automotive sector,” he said.
These improvements, however, have also led to slower growth of the marine insurance market relative to the broader global insurance industry. He said this is not due to weaker demand for maritime activity, but rather because improved risk management has reduced the frequency of loss events. Expanded market capacity across all marine segments also exert pricing pressures.
“The risk has improved so much that the insurance market size has grown more slowly,” Mr Lee said, adding that marine insurance now represents a smaller share of the global insurance market compared with the past.
Ongoing talent challenge
Mr Lee also highlighted an ongoing talent challenge within the sector.
Attracting young professionals into insurance is already difficult, but persuading them to specialise in general insurance, and then marine insurance specifically is even more challenging, he said.
“Marine is relatively difficult to be picked as a first choice,” he said, noting that talent tends to gravitate toward sectors with larger and faster-growing markets.
To address the issue, the Hong Kong government has launched a Maritime Services Traineeship Scheme in November 2025, aimed at encouraging insurers and brokers to train new entrants into the industry.
The programme provides incentives and subsidies for companies to recruit young talents and offer structured training within the maritime insurance sector. Trainees undergo a 24-month programme designed to prepare them for roles such as brokers or underwriters.
Further to that, Mr Chiu highlighted that marine underwriters and actuaries have been included on Hong Kong’s talent list under the city’s immigration and talent admission schemes, allowing qualified professionals in these fields to receive preferential treatment when applying to work in Hong Kong.
Marine Specialty Risk Insurance Pool
In November 2025, Hong Kong announced the official launch of a Marine Specialty Risk Insurance Pool, a landmark initiative to provide stable risk coverage for the Asian shipping industry by consolidating local underwriting capacity, further strengthening the city’s position as an international shipping and financial hub.
Both Messrs explained that the IA’s role is primarily to facilitate the pool’s growth rather than directly operate it, which currently involves five local insurance companies.
To attract broader stakeholder participation and to establish an efficient governance structure for the pool, the IA provides facilitative support, including relaxing restrictions on the number of insurers for the MGA managing the risk pool, as well as overseeing its operations, with a view to increasing underwriting capacity and promoting the pool’s sustainable development at greater maturity and scale.
Since the outbreak of conflicts in the Middle East, the number of vessels operating in the Persian Gulf region insured by the risk pool has increased, gradually demonstrating its value in bolstering the resilience of Mainland and Hong Kong shipowners against contingencies.
Signs of recovery
Mr Lee noted that the Hong Kong maritime sector experienced a prolonged downturn beginning in 2019, followed by further challenges as the pandemic hit in 2020 and lukewarm market conditions till 2023. During those years, he said the IA worked on various initiatives for the preparation of a stronger rebound for the maritime and the broader non-life sector.
Signs of recovery began emerging in 2024, with the market stabilising before returning to more normal growth levels in 2025. “The market has now normalised to a healthy level, and recent growth figures have been encouraging for the industry,” he said.
For the domestic market, growth is expected to track the broader performance of Hong Kong’s economy.
Mr Chiu added that maintaining a competitive insurance market remains important to ensure policyholders continue receiving coverage at appropriate pricing levels. A