13 March 2020
The Insurance Authority (IA) today (13 March 2020) released provisional statistics of the Hong Kong insurance industry for 2019, indicating a growth of total gross premiums by 9.1% to $580.2 billion over 2018.
(Percentage changes in brackets in the following paragraphs represent changes over 2018)
Long term business
The total revenue premiums of long term in-force business were $524.6 billion in 2019 (increased by 9.7%), mainly comprising $457.1 billion of Individual Life and Annuity (Non-Linked) business (increased by 15.3%), $27.7 billion of Individual Life and Annuity (Linked) business (decreased by 20.5%), as well as $33.8 billion of Retirement Scheme business (decreased by 19%).
On the other hand, new office premiums (excluding Retirement Scheme business) of long term business were $172.7 billion (increased by 6.5%), mainly comprising $160.4 billion from Individual Life and Annuity (Non-Linked) business (increased by 11.3%) and $11.8 billion from Linked business (decreased by 32.4%).
New office premiums in respect of policies issued to Mainland visitors were $43.4 billion (decreased by 8.8%), representing 25.2% of the total for individual businesses, with the recent social events taking a heavy toll in the fourth quarter that saw premiums contracted further by 23.4% to $7.4 billion, on top of 28.8% in the third quarter. Critical illness, whole life and medical products remained to be most popular, representing 57%, 34% and 3% of new policies taken out by Mainland visitors respectively. On mode of premium payment, about 99% of policies were settled at regular intervals, i.e. non-single premiums.
General business
In 2019, the gross and net premiums of general insurance business were $55.7 billion (increased by 3.9%) and $37.7 billion (increased by 6.8%) respectively. Overall underwriting profit rose 93.3% to reach $1.1 billion, propelled by Property Damage business resulting from the absence of any major typhoons.
As at 31 December 2019, the gross and net claims incurred by authorized insurers due to the recent social events were $1.3 billion and $411 million respectively, but upward adjustment of reserves is likely to impair underwriting performance going forward.
On direct business, gross and net premiums were $42.4 billion (increased by 10.5%) and $29.5 billion (increased by 16.7%) respectively. Same as before, Accident and Health (comprising Medical) business was the largest driving force with gross premiums of $17.2 billion (increased by 9%), followed by General Liability business with gross premiums of $10.8 billion (increased by 14%). Property Damage business reported a gain in gross premiums by 12.4% to $4.9 billion, while the gross premiums of Ships business went up by 21.2% to $2.1 billion after the authorization of a few new marine insurers.
Direct business generated an underwriting profit of $844 million (increased by 216.4%). Property Damage business recovered from a loss of $189 million caused by Typhoon Mangkhut in 2018 to a profit of $164 million. Ships business also turned around from a loss of $225 million to a profit of $42 million due to adjustment of reserves. General Liability (including Employees’ Compensation) business recorded a profit of $275 million (increased by 35.9%), while underwriting losses suffered by Motor Vehicle business widened by 10% to $404 million.
On reinsurance inward business, gross and net premiums were $13.3 billion (decreased by 12.5%) and $8.2 billion (decreased by 18.4%) respectively, mainly attributable to General Liability business whose gross premiums dropped by 48% to $1.9 billion, partly offset by Property Damage business whose gross premiums improved by 8.5% to $5.3 billion. Underwriting profit shrunk by 10.5% to $283 million as General Liability business deteriorated from a profit of $177 million in 2018 to a loss of $255 million in 2019, notwithstanding that Property Damage business chalked up a profit of $725 million (increased by 217.2%) due to better claims experience.
A summary of the provisional statistics is provided at annex , and further details could be obtained at the IA website .
Ends