Insurance Authority releases provisional statistics of Hong Kong insurance industry in the first half of 2023

31 August 2023
 

The Insurance Authority (IA) today (31 August 2023) released provisional statistics of the Hong Kong insurance industry for the first half of 2023, showing a decrease of total gross premiums by 1.4% to $295.7 billion over the corresponding period in 2022.

(Percentage figures shown in brackets represent year-on-year changes)

Long term business

Total revenue premiums of in-force long term business were $258.7 billion in the first half of 2023 (decreased by 2.2%), mainly comprising $227.5 billion from Individual Life and Annuity (Non-Linked) business (increased by 3.1%), $12.7 billion from Individual Life and Annuity (Linked) business (decreased by 15.9%), as well as $14.8 billion from Retirement Scheme business (decreased by 41.1%). This was largely caused by isolated transactions related to Retirement Scheme business during the same period in 2022. The total claims and benefits paid to policy holders amounted to $155.4 billion¹ (increased by 4.4%).

New office premiums (excluding Retirement Scheme business) of long term business were $103.1 billion (increased by 25.9%), made up of $96.4 billion from Individual Life and Annuity (Non-Linked) business (increased by 32%) and $6.6 billion from Individual Life and Annuity (Linked) business (decreased by 22.6%). Around 20,200 Qualifying Deferred Annuity Policies were issued, attracting $1.3 billion in terms of premiums that represent 1.3% of the total for individual businesses.

Capturing a strong impetus of growth in the first quarter and continuously benefiting from the low base of comparison last year, new business premiums derived from Mainland visitors in the first half of 2023 surged to $31.9 billion, representing 31% of the total for individual businesses, surpassing the corresponding figures of $26.3 billion and 26.4% respectively recorded in 2019. This rebound is led by demand for whole life and critical illness protection that accounted for 89% of the total number of policies issued, while 27% of the premiums were sourced from financing arrangements granted by banking institutions in Hong Kong. Some 96% of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premium).

General business

In the first half of 2023, the gross and net premiums of general insurance business were $37 billion (increased by 5.1%) and $23.3 billion (increased by 3.4%) respectively, against which total gross claims of $15.2 billion (increased by 11.3%) were paid out. The overall underwriting profit dropped from $2.5 billion to $1.5 billion.

On direct business, the gross and net premiums were $26.9 billion (increased by 3.1%) and $18.6 billion (increased by 3.6%) respectively. The gross premiums of Accident & Health business were $10.4 billion (increased by 13%), contributed by new coverages and higher rates for the medical subclass, as well as growth in travel insurance business for the non-medical subclass. Motor Vehicles business and Property Damage business reported gross premiums of $2.6 billion (increased by 8.3%) and $3.3 billion (increased by 3.2%) respectively. The gross premiums of Ships business receded 16.4% to $1.5 billion because of action to reclassify direct business to reinsurance inward business by a marine insurer since last year.

Direct business generated overall underwriting profit of $698 million (decreased by 60.6%), with the net claims incurred ratio rising from 55.1% to 60.8%. This was mainly attributable to undesirable outturn of Accident & Health business and lower underwriting profit of General Liability (comprising Employees’ Compensation) business. The former went from profit of $191 million to loss of $252 million, while profit for the latter plummeted by 46.5% to $424 million upon resurgence of claims after full resumption of economic activities.

On reinsurance inward business, the gross and net premiums were $10 billion (increased by 10.8%) and $4.6 billion (increased by 2.6%) respectively, propelled by Property Damage business and reclassification of direct Ships business as mentioned above. The overall underwriting profit dipped by 2.5% to $755 million, with deteriorations in Pecuniary Loss business and Property Damage business offset by improvement in General Liability business. The net claims incurred ratio lowered from 47.7% to 42.3%.

A summary of the provisional statistics is provided at Annex, and further details can be obtained at the IA website.

Ends

Note:

¹  Including lapse/surrender benefits of $76.7 billion, other claims and benefits of $78.7 billion.