Insurance Authority releases provisional statistics of Hong Kong insurance industry in the first three quarters of 2019

29 November 2019

The Insurance Authority (IA) today (29 November 2019) released provisional statistics of the Hong Kong insurance industry for the first three quarters of 2019, with total gross premiums of $436.9 billion, indicating an increase of 12.5% over the corresponding period in 2018.

(Percentage changes in brackets in the following paragraphs represent changes over the corresponding period of last year)

Long term business

Total revenue premiums of long term in-force business was $392.5 billion in the first three quarters of 2019 (increased by 12.9%). Revenue premiums of Individual Life and Annuity (Non-Linked) business were $341.7 billion (increased by 19.3%), while those of Individual Life and Annuity (Linked) business amounted to $20.5 billion (decreased by 20.5%). Contributions of Retirement Scheme business reached $25.7 billion (decreased by 18.5%).

New office premiums (excluding Retirement Scheme business) of long term business were $139.8 billion (increased by 15.4%), including $130.8 billion from Individual Life and Annuity (Non-Linked) business (increased by 21.8%) and $8.5 billion from Linked business (decreased by 35.3%).

The share of new office premiums in respect of policies issued to Mainland visitors was $36 billion (increased by 5.5%), making up 25.8% of the total for individual business, with volume in the third quarter reducing noticeably by 28.8% to $9.7 billion from $13.6 billion in the second quarter of 2019, largely attributed to the recent social events. In the first three quarters this year, the most popular products among Mainland visitors were critical illness, whole life and medical policies, representing 58%, 33% and 3% of new policies taken out by them respectively. On method of premium payment, about 99% of new policies taken out by Mainland visitors were settled at regular intervals, i.e. non-single premium.

General business

The gross and net premiums of general insurance business in the first three quarters of 2019 were $44.4 billion (increased by 9.5%) and $30.3 billion (increased by 8.1%) respectively. Overall underwriting performance recorded a profit of $856 million (increased significantly by 883.9%), mainly driven by Property Damage business, but the recent social events are likely to bring about a negative outlook going forward.

On direct business, gross and net premiums were $33.9 billion (increased by 11.1%) and $23.9 billion (increased by 10.5%) respectively. Accident and Health business (comprising Medical business) continued to be a key contributor, with gross premiums of $14 billion (increased by 10.1%); General Liability business also showed good impetus, with gross premiums of $8.5 billion (increased by 14.2%), mainly derived from Employees’ Compensation business. With a few newly authorized insurers, gross premiums of Ships business went up to $1.9 billion (increased by 23.4%).

Direct business generated an underwriting profit of $736 million (increased by 160.7%), benefiting from favourable claims experience in Property Damage business, Ships business and Pecuniary Loss business. Property Damage business recovered from a loss of $86 million in the first three quarters of 2018 as a result of Typhoon Mangkhut to a profit of $200 million in the corresponding period in 2019.

On reinsurance inward business, gross and net premiums stood at $10.5 billion (increased by 4.5%) and $6.4 billion (increased by 0.1%) respectively. The underwriting performance turned from a loss of $195 million to a profit of $120 million, again due to strong underwriting performance of Property Damage business, which improved from a loss of $31 million to a profit of $476 million.

A summary of provisional statistics of the Hong Kong insurance business for the first three quarters of 2019 is in the annex. Further details are available at the IA website.

Ends