Insurance Authority releases provisional statistics of Hong Kong insurance industry for 2018

15 March 2019

The Insurance Authority (IA) today (15 March 2019) released provisional statistics of the Hong Kong insurance industry for 2018, with total gross premiums reaching $531.7 billion, indicating an increase of 8.6% over 2017.

(Percentage changes in brackets in the following paragraphs represent changes over 2017)

Long term business

The total amount of revenue premiums of long term in-force business was $478.2 billion in 2018 (increased by 8.3%). Revenue premiums of Individual Life and Annuity (Non-Linked) business were $396.5 billion (increased by 4.0%) while those of Individual Life and Annuity (Linked) business amounted to $34.8 billion (increased by 9.9%). Contributions of Retirement Scheme business reached $41.7 billion (increased by 74.2%).

On new business, new office premiums (excluding Retirement Scheme business) of long term business were $162.2 billion (increased by 3.7%), including $144.1 billion from Individual Life and Annuity (Non-Linked) business (increased by 0.8%) and $17.4 billion from Linked business (increased by 37.0%).

New office premiums in respect of policies issued to Mainland visitors totalled $47.6 billion (decreased by 6.4%), accounting for 29.4% of the total new office premiums for individual business. Among these new policies, about 96% were medical or protective in nature, such as critical illness, medical, whole life, term life and annuity products. In terms of premium payment pattern, about 99% of the policies were paid at regular intervals, i.e. non-single premiums.

General business

In 2018, the gross and net premiums of general insurance business were $53.6 billion (increased by 11.3%) and $35.3 billion (increased by 6.6%) respectively. Overall underwriting performance turned from a loss of $792 million in 2017 to a profit of $583 million in 2018.

On direct business, gross and net premiums stood at $38.4 billion (increased by 6.5%) and $25.2 billion (decreased by 0.1%) respectively. The growth of gross premiums was mainly contributed by Accident & Health business (comprising Medical business), General Liability business (comprising Employees’ Compensation business) and Property Damage business, of which the amount were $15.8 billion (increased by 9.4%), $9.5 billion (increased by 4.7%) and $4.4 billion (increased by 7.3%) respectively. In spite of the premium growth, the underwriting profit of direct business reduced from $445 million to $267 million (decreased by 40%). Due to the impact of Typhoon Mangkhut, which affected the direct business significantly, the underwriting performance of Property Damage business turned from a profit of $209 million in 2017 to a loss of $189 million in 2018. The underwriting performance of Ships business also deteriorated due to adverse claims experience, turning from a profit of $73 million to a loss of $225 million. On the other hand, although Motor Vehicle business and Employees’ Compensation business still suffered from underwriting losses, the losses shrank from $395 million to $368 million and from $541 million to $172 million respectively.

On reinsurance inward business, gross and net premiums reached $15.2 billion (increased by 25.4%) and $10 billion (increased by 28.3%) respectively. The major contributors of the growth were General Liability business, Property Damage business and Ships business. Gross and net premiums of General Liability business increased from $1.6 billion to $3.6 billion (increased by 127.4%) and from $1 billion to $3 billion (increased by 196.7%) respectively. The underwriting performance also turned from a loss of $1.2 billion, attributable mainly to Typhoon Hato related claims in 2017, to a profit of $317 million in 2018.

A summary of provisional statistics of the Hong Kong insurance business for 2018 is in the annex. Further details are available at the IA website (www.ia.org.hk).

Ends