What can I do about this shy and insecure guy? Does he even like me?

He most certainly has a crush on you too. But yeah, you have to make the first move. Not when anyone is around though. If you hug like that again just kiss him when he looks at you. It doesn't even have to be on the lips either. Cheek is just fine too. Just don't kiss him on the forehead (it's what you would do with a little child and basically says: I like you, but not like that and I want to look after you). You might also kiss him when you're talking and he suddenly just looks at you.