Insurance Authority releases provisional statistics of Hong Kong insurance industry in 2022
10 March 2023
The Insurance Authority (IA) today (10 March 2023) released provisional statistics of the Hong Kong insurance industry for 2022, showing a decrease of total gross premiums by 7.7% to $556 billion over 2021.
(Percentage figures shown in brackets represent year-on-year changes)
Long term business
Total revenue premiums of in-force long term business were $491.4 billion in 2022 (decreased by 9.1%), mainly comprising $412.6 billion from Individual Life and Annuity (Non-Linked) business (decreased by 7.6%), $28.3 billion from Individual Life and Annuity (Linked) business (decreased by 36.5%), as well as $44.5 billion from Retirement Scheme business (increased by 1.3%). The decrease in revenue premiums of in-force long term business in 2022 was mainly attributed to the premium payment pattern of some products and a general decline of new business in 2022. Furthermore, total amount of payment made to policy holders in terms of claims and benefits was $297.8 billion1 (decreased by 3%).
During the same period, new office premiums (excluding Retirement Scheme business) of long term business were $134.9 billion (decreased by 19.1%), made up of $119.5 billion from Individual Life and Annuity (Non-Linked) business (decreased by 11.9%) and $14.9 billion from Linked business (decreased by 51.6%). Around 29,000 Qualifying Deferred Annuity Policies were issued, attracting $2 billion in terms of premiums that represent 1.5% of the total for individual businesses.
New business premiums derived from Mainland visitors were $2.1 billion (increased by 200.3%), representing 1.5% of the total for individual businesses. The significant upturn is caused by impact of isolated transactions and a relatively low base of comparison for 2021. Some 95% of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premium). Whole life, critical illness and medical insurance accounted for 41%, 32% and 19% of the policies respectively.
Total gross and net premiums of general insurance business in 2022 were $64.6 billion (increased by 4.5%) and $42.1 billion (increased by 1.6%) respectively, against which payment of total gross claims was $30 billion (decreased by 4.5%). The overall underwriting profit recorded an increase from $2 billion to $4.2 billion.
On direct business, the gross and net premiums were $47.1 billion (increased by 2.1%) and $33.2 billion (increased by 0.5%) respectively. The growth in gross premiums was mainly contributed by Accident & Health business and General Liability (comprising Employees’ Compensation) business, with gross premiums of $16.7 billion (increased by 5.8%) and $12.7 billion (increased by 6.9%) respectively on the back of rates hardening and new business. This was partially offset by a reduction of $0.5 billion on Pecuniary Loss business due to reduced loans drawdown under the Mortgage Insurance Programme and a decrease of $0.5 billion in the Ships business due to reclassification from direct business to reinsurance inward business.
Direct business generated an overall underwriting profit of $2.2 billion (increased by 67.5%), with the net claims incurred ratio improved from 61% to 58.1%, mainly contributed by positive results achieved in General Liability (comprising Employees’ Compensation) business, Pecuniary Loss business and Property Damage business. On the other hand, the underwriting loss of Accident & Health business widened from $58 million to $295 million due to the surge in the number of claims and worsening claims experience for both individual and group medical businesses.
On reinsurance inward business, the gross and net premiums were $17.6 billion (increased by 11.7%) and $8.9 billion (increased by 5.6%) respectively. The growth in gross premiums was driven by the substitution of direct business by reinsurance inward business in Ships business and new businesses in both Accident & Health business and Pecuniary Loss business. The overall underwriting profit soared from $0.6 billion to $1.9 billion and the net claims incurred ratio reduced from 59.8% to 44.7%, mainly due to better claims experience in Property Damage business, General Liability business and Pecuniary Loss business.
1 Including lapse/surrender benefits of $130.9 billion, other claims and benefits of $166.9 billion.