Insurance Authority releases provisional statistics of Hong Kong insurance industry in the first half of 2022
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 billion1 (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.