Having grown from a cottage industry covering commercial seafaring ventures to a fullblown diversified and globalized financial centre, Hong Kong’s insurance industry has withstood the test of many vicissitudes over the past century.

However, for reasons unbeknownst to most, no completed recorded history existed of this amazing journey. If nothing were done about this vaccuum, valuable historical materials would be obliterated by the passage of time.

This is where the Hong Kong Federation of Insurers has stepped up to the plate.

Enriching Lives: A History of Insurance in Hong Kong, 1841–2010 was born of the urgency to document the...

It was my greatest pleasure to have witnessed the fruition of the book project during my tenure as HKFI’s chairman.

The writing of Enriching Lives: A History of Insurance in Hong Kong, 1841–2010 was made possible by the scores of industry veterans who generously contributed their time and thoughts. Their recollection of little known vignettes casts the industry in a humanistic light.

In a sense, the book serves as a compilation of oral history. It is a happy marriage of history and human interest....

Insurance is one of the oldest industries in Hong Kong, and it has long played a significant role in the city’s economic development. Suffice it to say that the insurance industry has evolved in step with the economy at large. In essence, the industry’s development encapsulates that of the overall development of the territory.

The industry’s birth in Hong Kong can be traced to the establishment of the Canton Insurance Office Ltd. and the Union Insurance Society of Canton in the nineteenth century. Canton Insurance was jointly formed, and run, by turns, by Davidson-Dent (later called Dent & Co.) and...

Sir William’s words have stood the test of time. Writing fifty years later, an insurance executive considered them again in a book called Adventures and Perils: The First Hundred and Fifty Years of Union Insurance Society of Canton, Ltd.¹ ‘That speaker [Sir William] knew then, as we know today, that trade is not simply a matter of two parties agreeing to an exchange of goods or services for good consideration,’ Alan Chalkley wrote. ‘The conditions under which the exchange takes place, and the value of consideration, are affected by various external factors unrelated to the trade. It can be said...

Toward the end of the Qing Dynasty, foreign insurers in China began to open up to investments from local merchants. However, Chinese investors were entitled only to profits and not voting rights or any voice in management. In other words, these insurance companies were lopsided joint ventures at best and far from equal partnerships.

The first foreign insurer that solicited Chinese investments was Union Insurance, which, when Dent & Co. founded it in 1830, had a significant capital injection from some Guangzhou business investors. In Shanghai, many foreign enterprises, including insurance companies, also welcomed Chinese money.

In 1868, as recounted...

On 7 December 1941, the Japanese attacked Pearl Harbor and occupied Shanghai’s International Concession. World War II thus spilled into the Pacific theatre. By Christmas day, Hong Kong was invaded. The war nearly destroyed a century of painstaking effort among British firms in Hong Kong and China. The colony’s insurance sector was not spared the havoc.

In face of imminent invasion, foreign insurers made plans to suspend business and retreat from Hong Kong. In January 1941, Union moved its headquarters from Hong Kong to Sydney, setting up an office at the City Mutual Building, 60 Hunter Street. The relocation decision...

Between the late 1960s and the mid-1980s, Hong Kong’s economy expanded at a breakneck pace. With the emergence of homegrown stock markets, a whole slew of global financial institutions rushed in, transforming the city into an international financial centre in Asia.

As Yu-ching Jao, a retired honorary professor at Hong Kong University’s School of Economics and Finance, has pointed out, Hong Kong’s rise as an international financial centre was only one of its two postwar achievements. The other was its successful transition from an entrepôt to a prosperous industrial town. Many locals and even some foreigners would declare Hong Kong...

All legal matters related to insurance were dealt with using contractual agreements and common law cases. The earliest government regulations on the insurance industry were embodied in laws governing other economic activities, such as the Companies Ordinance and the Workmen’s Compensation Ordinance. In the 1950s, the Hong Kong government set about laying down laws for the insurance sector. Hence, both the Third Party (Rights Against Insurers) Ordinance and the Motor Vehicles Insurance (Third Party Risks) Ordinance were enacted. The former guarantees a third party’s right to seek compensation in the event that a policyholder or insurance firm files for bankruptcy....

The shift of Hong Kong’s economy from manufacturing to services started in the mid-1980s and continued apace into the 1990s. In 1986, the services sector already accounted for nearly 70% of the city’s GDP; in 1997, it rose to 85%. By then, the shift was almost complete.

The impact on the insurance sector could not have been more direct. The traditional general products such as marine and employees’ compensation, all associated with manufacturing, no longer brought in the most premium. In their stead, long-term products such as life coverage began to rake in increasing revenue. In 1987, general insurance still...

The handover on 1 July 1997 made Hong Kong a Special Administrative Region (SAR) within China. Around that time, the provisional government set about adding seats in the Legislative Council to represent such specific industries and other ‘functions’, such as finance, insurance, real estate, and commerce; hence these members were representatives of ‘functional constituencies’. On 24 March of the same year, the HKFI’s special joint session submitted a proposal to the preparatory committee of the SAR government, pointing out that insurance has a crucial role in Hong Kong’s financial market. The proposal also stressed that the sector already satisfied the...

The reform and opening up of China in the 1980s set off a rapid transformation of Hong Kong’s economy. Where manufacturing had once been king, the services sector became dominant. In 2007, manufacturing accounted for a mere 2.5% of GDP (as opposed to 70% in 1970), while services in 2007 accounted for 92.3% of the economy. Within the sector, finance, insurance, real estate, and business services were the most important producers, delivering 29% of GDP.

In 2008, the insurance sector generated $188 billion in gross premiums, amounting to about 12% of GDP, and it employed 46,000 people, 1.3% of the...