HK insurers urged to review lower-rated bond exposure

Insurance firms in Hong Kong with substantial holdings of low-grade bonds are facing a greater risk of insolvency, given that the cost of owning such assets is set to rise sharply under the city’s incoming risk-based capital (RBC) regime. That’s the view of industry experts, who argue that insurers should thus take a close look at their fixed income portfolios after many have allocated more to lower-quality, higher-yielding debt in recent years. Hong Kong’s proposed RBC rules – …