Hong Kong summit an Asian business approach.

(From Insurance Day)

Byline: Suzanne Moore

LAST week, for probably the first time ever, a group of insurers indulged in behaviour riskier than anything Mick Jagger was prepared to contemplate they visited Hong Kong. Just a few days before the pneumonia outbreak forced the Rolling Stones to cancel their concerts in the territory, about 100 insurers, brokers and lawyers gathered here for the third annual chief executive summit, where the focus this year was on "Eyeing world-class standards the Asian approach".

Regulation and the need to strike a balance between consumer protection and market development was one of the recurring themes.

Hong Kong insurance commissioner Benjamin Tang summed up the dilemma of regulators everywhere when he said: "I would love to be loved but I don't think that's a prerequisite." Proposed new policyholder protection regulations here are proving unpopular, with insurers reluctant to take on financial responsibility for the repercussions of company failures. They see that as a responsibility for the regulator and, to a certain extent at least, the consumer. No decisions have yet been made and Mr Tang says he is keeping "an open mind", promising full consultation with the industry before any new scheme is set up, as well as a cap on compensation. He is well aware of the industry's concerns that a protection scheme could attract "moral hazard" and he told delegates: "We don't want the good boys to bail the bad boys."

In India, which has an insurance penetration of just 1.95%, regulatory concerns are more to do with "creating insurance awareness and constantly innovating to meet customer needs", according to PA Balasubramanian, from the country's Insurance Regulatory & Development Authority. He says the industry must recognise its developmental role, noting: "Insurers that tend to favour the 'creamy layer' of the urban population may well miss a large chunk of the insurable population."

Corporate governance was high on the agenda too. Koukei Higuchi, chairman of Tokyo Marine & Fire Insurance, identifies corporate social responsibility as "one of the hottest issues" now facing insurers worldwide. Mr Higuchi, who is also current chairman of the East Asia Insurance Congress, says the "ethics of top management [are] often severely called to account in Japan". He reminded delegates of the "need to maintain morals at a high level" and bear in mind the idea of noblesse oblige or its Japanese equivalent, bushido especially where environmental and social responsibilities are concerned.