31 August 2022
The Insurance Authority (IA) today (31 August 2022) released provisional statistics of the Hong Kong insurance industry for the first half of 2022, showing a decrease of total gross premiums by 2.3% to $299.9 billion over the corresponding period in 2021.
(Percentage figures shown in brackets represent year-on-year changes)
Long term business
Total revenue premiums of in-force long term business were $264.7 billion in the first half of 2022 (decreased by 3.3%), mainly comprising $220.7 billion from Individual Life and Annuity (Non-Linked) business (decreased by 2.4%), $15.1 billion from Individual Life and Annuity (Linked) business (decreased by 25.1%), as well as $25.2 billion from Retirement Scheme business (increased by 5.3%). Furthermore, total amount of payment made to policy holders in terms of claims and benefits was $148.8 billion 1 (decreased by 1.4%).
During the same period, new office premiums (excluding Retirement Scheme business) of long term business were $81.9 billion (increased by 1.7%), made up of $73 billion from Individual Life and Annuity (Non-Linked) business (increased by 9.1%) and $8.5 billion from Linked business (decreased by 36.2%). Around 17,000 Qualifying Deferred Annuity Policies were issued, attracting $1.1 billion in terms of premiums that represent 1.4% of the total for individual businesses.
New business premiums derived from Mainland visitors were $540 million (increased by 150%), representing 0.7% of the total for individual businesses. The significant upturn is caused by impact of isolated transactions and a relatively low base of comparison for the same period in 2021. Some 95% of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premium). Critical illness, whole life and medical insurance accounted for 32%, 32% and 26% of the policies respectively.
General business
In the first half of 2022, the gross and net premiums of general insurance business were $35.2 billion (increased by 5.5%) and $22.5 billion (increased by 1.7%) respectively, against which total gross claims payment was $13.7 billion (decreased by 8.1%). The overall underwriting profit surged from $794 million to $2,545 million.
On direct business, the gross and net premiums were $26.1 billion (increased by 4.2%) and $18 billion (increased by 1.5%) respectively. The General Liability (comprising Employees’ Compensation) business, Accident & Health business and Property Damage business grew by 10.3%, 3.5% and 6.2% respectively, mainly attributable to rates hardening and new business, partially offset by Pecuniary Loss business whose gross premiums declined by 4.1% as a result of lesser loan drawdowns under the Mortgage Insurance Programme.
Direct business generated an overall underwriting profit of $1,771 million (increased by 134%), with the net claims incurred ratio dropping from 59.8% to 55.1% due to positive experience recorded for General Liability (comprising Employees’ Compensation) business, Ships business and Pecuniary Loss business. On the other hand, underwriting profit of Accident & Health business narrowed from $291 million to $191 million as the claims reserves for Medical subclass resumed to its pre-pandemic level.
On reinsurance inward business, the gross and net premiums were $9.1 billion (increased by 9.2%) and $4.5 billion (increased by 2.8%) respectively, driven by new business in Ships business and Pecuniary Loss business. The overall underwriting profit hiked from $37 million to $774 million, with the net claims incurred ratio lowering from 67.8% to 47.7%, since the Property Damage business sprang back from a loss of $198 million to a profit of $334 million and Pecuniary Loss business turned around from a loss of $18 million to a profit of $171 million.
A summary of the provisional statistics is provided at Annex , and further details could be obtained at the IA website .
Ends
Note:
1 Including lapse/surrender benefits of $61.3 billion, other claims and benefits of $87.6 billion.