Hong Kong lands first ILS sidecar with $12 million PICC offshore wind transaction

By Ashish Tiwari Oct 14 (The Insurer) — PICC P&C has completed a $12 million ILS transaction in Hong Kong that uses a reinsurance sidecar to provide quota-share protection for offshore wind farm property insurance business in mainland China, the Hong Kong government said on Wednesday. The transaction is PICC P&C’s inaugural ILS issuance and gives the insurer another channel to transfer underwriting risk to capital-market investors. Secretary for Financial Services and the Treasury Christopher Hui said the deal supported Hong Kong's ambition to build its role as a regional and global hub for managing catastrophe and specialty risk. “This will enable us to unleash the synergy effect of multilayered risk transfer and pooling mechanisms through ILS and other tools,” Hui added. The issuance follows last year’s notice from China's National Financial Regulatory Administration that backed mainland insurers issuing sidecar ILS in Hong Kong to diversify the transfer of catastrophe insurance risk. Hong Kong introduced a dedicated regulatory regime for ILS and a pilot grant scheme in 2021. The city has since issued seven catastrophe bonds and one sidecar, with total issuance of about HK$6.3 bi