Hong Kong’s first reinsurance sidecar issued at $94m by mainland PICC

The sidecar covers reinsurance for offshore windfarm property insurance in mainland China.

Mainland insurer PICC Property and Casualty Co Ltd has issued Hong Kong’s first sidecar, a form of insurance-linked securities (ILS), worth $94m to provide quota-share reinsurance for offshore windfarm property insurance businesses in mainland China.

The Financial Services and the Treasury Bureau (FSTB) welcomed the development, saying it can further strengthen Hong Kong’s capacity to manage catastrophe and other specialty risks.

"ILS and captive insurance can provide enterprises 'going global' with diversified means of spreading and managing risks,” said FSTB Secretary Christopher Hui.

“We expect this combination of financial policy measures will allow enterprises to leverage Hong Kong as a safe haven for 'going global' with greater ease of mind,” Hui added.

A sidecar is an ILS structure that lets investors provide capital to support a specific insurance or reinsurance portfolio. It is typically funded through equity or a debt instrument, such as preference shares or participating notes.

In September 2025, the National Financial Regulatory Administration issued a notice supporting mainland insurers that wish to issue sidecars in Hong Kong, with the aim of diversifying channels for spreading catastrophe insurance risks.

To date, seven catastrophe bonds and one sidecar worth a combined $6.3b have been issued since Hong Kong established a dedicated regulatory regime for ILS and launched a grant scheme in 2021.