Hong Kong authorized two more captive insurers on July 8, taking the territory’s total to nine and extending a formation streak that has coincided with a softening global commercial insurance market and an intensifying contest among Asian domiciles for corporate risk business.

The Insurance Authority (IA) said it granted authorization to HSH Captive Limited, established by hospitality group The Hongkong and Shanghai Hotels, Limited, and SF Captive Limited, set up by Shenzhen-headquartered logistics operator SF Holding Co Ltd. The additions follow CNNC Captive Insurance Limited, cleared in March, and bring the number of authorizations recorded in the first half of 2026 to three, matching the pace the Financial Services and the Treasury Bureau (FSTB) described in a same-day statement.

A build-out aimed at two customer bases

The IA has framed its captive push around Mainland Chinese enterprises and locally based multinationals. IA chief executive officer Clement Cheung said the latest authorizations bear “testimony to the successful execution of our strategy of developing Hong Kong into a leading risk management centre by focusing on local multinational corporations as well as state-owned enterprises and privately-owned enterprises in the Chinese Mainland,” according to the IA’s July 8 release. He added that “the additional business generated by and different operating models associated with these new market entrants should also prove valuable in nurturing a mature captive ecosystem in Hong Kong.”

The two sponsors illustrate that split. The Hongkong and Shanghai Hotels is a Hong Kong-listed owner-operator of hotels under the Peninsula brand and prime commercial and residential real estate across Asia, the US, and Europe, according to the company. SF Holding is a logistics group based in Shenzhen. The composition of the register reflects the same dual focus: alongside Mainland state-linked names such as CNOOC, Sinopec, CGN, and SAIC Motor, the list now includes HSBC’s Wayfoong (Asia) Limited – authorized in May 2025 as, per the IA, the first captive formed in Hong Kong by a multinational enterprise – and the two July entrants. MM Lee, an IA general business division executive director, said in September 2024 that “the use of captives by Mainland enterprises to holistically monitor their overseas project risks and scale up their intra-group risk management capacity is gaining prominence.”

The market cycle behind the timing

The formations are occurring as commercial insurance pricing declines. Marsh reported that global commercial insurance rates fell 5% in the first quarter of 2026, the seventh consecutive quarterly decrease after roughly seven years of increases, with Asia also down 5%. Marsh noted that some clients have used the environment to examine alternative risk transfer options, including self-insurance and captives, and that buyers have room to adjust retentions and program structures.

Soft markets historically prompt large corporations to weigh retaining more risk internally, and a captive is one vehicle for doing so. The FSTB tied the recent activity to enterprises’ interest in the territory’s regulatory setting and location, with Secretary for Financial Services and the Treasury Christopher Hui stating that the two groups’ decisions “demonstrate the strong confidence of various local and overseas enterprises in Hong Kong’s robust regulatory regime and favourable business environment.”

How Hong Kong stacks up against Singapore and Labuan

Hong Kong remains a smaller domicile than its principal regional competitors. The Monetary Authority of Singapore’s (MAS) financial institutions directory listed approximately 87 captive insurers as at April 2026, comprising 79 general, seven composite, and one life captive, though the regulator notes an entity may hold more than one licence; the Singapore Captive Insurance Association (SCIA) describes Singapore as the largest captive domicile in Asia. In Malaysia, the Labuan Financial Services Authority (Labuan FSA) – which has characterized the Labuan International Business and Financial Centre (Labuan IBFC) as Asia’s second-largest captive market – reported that captive gross premiums rose 7.2% to US$726 million in 2025, accounting for more than a third of the centre’s insurance premiums.

On regulatory terms, Hong Kong’s regime is lighter. Under the Insurance (Marine Insurers and Captive Insurers) Rules (Cap. 41U), a captive’s capital base must be no less than HK$2 million, against a HK$20 million floor and a risk-based capital calculation for general business insurers, per the IA. Captives are exempted from maintaining assets in Hong Kong and from appointing a certifying actuary and need only notify the IA after appointing a key person in a control function. Captives also sit outside the prescribed and minimum capital thresholds that apply to most authorized insurers under Hong Kong’s risk-based capital regime, on which the IA consulted in early 2026. A 50% profits tax reduction on offshore-risk business has applied since the 2013/14 year of assessment, per the IA.

What could widen the pipeline

The IA has signalled it is assessing whether to broaden permitted captive structures and risk coverage, a step it has linked to competitiveness. IA chairman Stephen Yiu tied captive and reinsurance growth to Belt and Road infrastructure and energy-transition financing in comments on the 2025 Policy Address. Whether Hong Kong narrows the gap with Singapore and Labuan may depend on the scope of those changes and on how long the current pricing cycle persists.