BHSI withdraws from Hong Kong terrorism poolDecember 11 2018 by InsuranceAsia News Staff
Berkshire Hathaway Specialty Insurance has become the first insurer in Hong Kong to provide employees’ compensation (EC) terrorism coverage to customers directly after withdrawing from Hong Kong’s centralised terrorism pool on December 1.
Hong Kong’s EC terrorism pool was established to provide terrorism cover for Hong Kong EC policyholders after the September 11 terror events in New York in 2001 when capacity had receded in the international markets. Participation is voluntary and the pool provides a maximum limit of HK$10 billion (US$1.28 billion), which is shared among all EC policyholders for all terrorism claims on a first-come-first-served basis.
Insurers participating in the pool must charge their EC policyholders a 3% levy on policy premiums, which is then remitted to the Hong Kong government.
From December 1, the EC terrorism coverage provided by BHSI is no longer subject to any of the pool’s restrictions. BHSI’s customers are no longer subject to the 3% levy on their EC policy premiums, and payments for terrorism claims are no longer contingent upon payment or reimbursement from the pool.
“The feedback from the customers and brokers we have discussed our approach with has been incredibly encouraging,” said Marc Breuil, BHSI’s regional president for Asia and the Middle East. “BHSI’s employees’ compensation policies are now exclusively backed by its own financial strength — which carries the same S&P rating as the Hong Kong SAR government — and provide EC terrorism coverage to policyholders without the obligation to pay the levy.”