Since March 2025, the National Financial Regulatory Administration of China has abolished the US$2 billion total asset threshold for Hong Kong and Macau financial institutions investing in mainland insurers, signalling not only a new stage of opening-up but also a fresh source of momentum for the industry. Looking ahead to 2026, a broader spectrum of smaller Hong Kong and Macau institutions is expected to enter the market, bringing with them more diverse governance practices and innovative approaches. Cross-border collaboration, particularly within the Greater Bay Area, is set to gain pace in health, pension and green insurance, directly addressing the pressing societal needs of an ageing population and the green transition. Meanwhile, wider foreign participation is likely to elevate disclosure standards and strengthen governance frameworks, thereby enhancing public trust in the sector. Overall, this policy both widens the channel for overseas capital and conveys China’s firm commitment to deepening financial liberalisation, with its social impact unfolding through cross-border integration, support for the real economy and improvements in public welfare.

In 2025, major Chinese insurers launched products covering drones and other low-altitude aircraft, reflecting Beijing’s policy drive to develop the 'low-altitude economy'. With strong regulatory support for drones, logistics applications, and urban air mobility, the insurance sector is moving quickly to roll out liability and property covers tailored to this emerging field. Likely claims scenarios include bodily injury to third parties, property damage in congested cities, and product liability linked to drone components or software systems. A systemic failure in air-traffic management could result in multiple simultaneous incidents, exposing reinsurers to concentrated, catastrophe-style losses. Going forward we expect litigation to test the scope of exclusions relating to 'experimental flight' activities, cyber-hacking, and other technology-driven risks. Courts may also face challenges in allocating liability where responsibility is split between operators, manufacturers, and system providers. The rapid expansion of this sector underscores both the opportunities for insurers to capture growth and the heightened legal and underwriting complexities that will shape market practice.

In 2025, Ping An P&C launched the EagleX Global platform, integrating satellite imagery, risk mapping and AI-powered alerts. Its early success during the Beijing hailstorm demonstrates a shift in China’s insurance sector from reactive compensation to proactive prevention. Looking ahead to 2026, such tools are set to become mainstream, enabling insurers to mobilise adjusters faster, cut disputes, and guide businesses and households to act early - whether closing factories or moving vehicles - to avoid losses at source. The impact reaches beyond claims efficiency: by reducing the need for extensive post-disaster reconstruction, EagleX also helps conserve resources and mitigate environmental damage, aligning with the broader push for green development. Reinsurers are likely to make these capabilities a precondition for capacity. Insurers, in turn, must strengthen governance through customer consent, encryption and deletion protocols. Those able to deliver a 'detect–decide–deploy' cycle within 24–48 hours will stand out not only on cost and client retention, but also on their environmental and social credentials.

China’s insurance market continues to demonstrate remarkable growth momentum. In 2024, nationwide premium income exceeded RMB5.7 trillion (US$800.6 billion), representing an 11.5% year-on-year increase and underscoring the resilience of insurance demand despite broader economic pressures. Rising risk awareness among households and the expanding need for liability, health and property protection among corporates suggest that, by 2026, premium growth will continue to outpace the wider economy. At the same time, the rapid rise of the Shanghai International Reinsurance Exchange is reshaping the market landscape. By September 2025, 118 institutions had secured trading seats, including 28 foreign participants, highlighting its emergence as a hub for cross-border risk diversification and capital allocation. Looking ahead, regulatory innovation and real-time clearing mechanisms are expected to catalyse further co-operation between domestic and international players, cementing China’s growing influence in the global reinsurance arena. For insurers worldwide, this represents both an entry point to the Chinese market and a strategic opportunity to enhance international risk management and collaboration.

Under the State Council’s 2025 Legislative Work Plan, the draft amendment to the Insurance Law has been listed as a key proposal to be submitted to the Standing Committee of the National People’s Congress (NPC). The National Financial Regulatory Administration has likewise confirmed in recent public statements that the revision process is accelerating. Although the full draft has not yet been released for consultation on the official NPC website, industry debate has centred on two main themes: (1) strengthening capital requirements, solvency standards and corporate governance in line with a risk-based supervisory approach; and (2) elevating consumer protection by setting out stricter rules on product suitability, disclosure of exclusion clauses, claims settlement deadlines and transparency. In essence, this reform represents not only an upgrade of the 2015 version of the Insurance Law, but also a co-ordinated step alongside the Financial Law and the Financial Stability Law. Its ultimate aim is to reinforce systemic resilience while striking a more refined balance between insurers’ operational flexibility and the protection of policyholders.

Hong Kong has traditionally adopted a relatively hands-off approach to regulation, with regulatory powers in place described as somewhat conservative. However, in recent years the government has adopted a more robust approach, particularly following the global financial crisis in 2008, most notably establishing the Accounting and Financial Reporting Council to oversee accountants and auditors. With the recent economic downturn, consolidation and change in the mix of players operating in Hong Kong, we now predict a shift to a comparatively pragmatic business-friendly approach to regulation in 2026 to increase the attractiveness of the jurisdiction by making it more accessible and easier to operate in. Hong Kong has also recently taken steps to regulate and embrace virtual assets and we expect this trend to continue in 2026.

Hong Kong recently saw the passage of the Protection of Critical Infrastructure (Computer System) Ordinance into law, the provisions of which will come into effect on 1 January 2026. The new laws aim to protect local infrastructure in certain sectors designated as critical. Banks and financial institutions (in addition to those operating in other prescribed sectors) will be required to implement measures to prevent and report security breaches. Failure to do so may attract a fine of up to HK$5 million (US$640,000). We expect increased regulatory activity in encouraging organisations to bolster the security and reporting any breaches of their computer systems in 2026.

With much of the world now effectively closed to Russian investment, Russia is increasing its historic interest in its next door neighbour China, including Hong Kong, as an environment in which to create economic partnerships.  Bilateral trade between Russia and China was reported as rising 90% year on year in 2024 to US$245 billion, with US$3.3 billion of that focused on Hong Kong. Russian companies are keen to engage in Hong Kong's infrastructure projects and its entrepreneurs are increasing their involvement in the manufacturing sector. But greater Russian investment into Hong Kong brings heightening risk for local trading entities of breaching international and particularly United States sanctions. We predict those issues will increasingly come to the forefront of corporate risk teams' concerns while businesses in Hong Kong look to take advantage of improved trading opportunities.

We have seen an unprecedented increase in the number of black rainstorm warnings issued by the Hong Kong Observatory in 2025. Three black rainstorm warnings were issued within a four-day period in early August 2025, with daily rainfall of almost 370mm recorded on 5 August, the highest daily rainfall in August since records began in 1884. The deluge strained Hong Kong's historically resilient infrastructure and caused widespread flash flooding to a population not accustomed to the effects of such extreme weather. It is predicted that those who have not previously considered coverage will in 2026 begin to explore insurance products to reduce potential risks from predicted increases in instances and the effects of adverse weather in Hong Kong. Insurers should ensure they have adequate reserves available to cater for the potential influx of both sales queries and claims.

Hong Kong saw sharp growth in initial public offerings (IPOs) on its public bourse in the first half of 2025, propelling it to take back the crown of ranking first globally in the amount of funds raised through IPOs. It is expected that the IPO trend in Hong Kong will continue into 2026 and is likely to lead to higher demand for D&O policies to cover directors and officers against personal financial losses arising from allegations or findings of wrongful acts committed in their managerial capacity. Given the level of scrutiny and public interest in the business operations of listed companies in Hong Kong, it is essential for private companies in the process of listing to evaluate their directors' and officers' potential exposure and ensure sufficient and appropriate insurance is in place to afford comfort to management.