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

30 November 2023
 

The Insurance Authority (IA) today (30 November 2023) released provisional statistics of the Hong Kong insurance industry for the first three quarters of 2023, showing a decrease of total gross premiums by 1% to $428.6 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 $374.8 billion in the first three quarters of 2023 (decreased by 1.7%), mainly comprising $329.2 billion from Individual Life and Annuity (Non-Linked) business (increased by 2.8%), $18.2 billion from Individual Life and Annuity (Linked) business (decreased by 17%), as well as $22.4 billion from Retirement Scheme business (decreased by 35%). This was largely caused by isolated transactions related to Retirement Scheme business during the same period in 2022. Furthermore, the total claims and benefits paid to policy holders amounted to $239.7 billion¹ (increased by 7.4%).

New office premiums (excluding Retirement Scheme business) of long term business were $146.5 billion (increased by 30.6%), made up of $137.3 billion from Individual Life and Annuity (Non-Linked) business (increased by 37.4%) and $9 billion from Individual Life and Annuity (Linked) business (decreased by 24.4%). Around 24,300 Qualifying Deferred Annuity Policies were issued, attracting $1.6 billion in terms of premiums that represent 1.1% of the total for individual businesses.

New business premiums derived from Mainland visitors went down by 32.9% to $15 billion on a quarterly basis, but the first three quarters still saw such premiums reaching $46.8 billion or 32% of the total for individual businesses. As before, around 97% 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 54%, 35% and 4% of the policies issued respectively.

General business

In the first three quarters of 2023, the gross and net premiums of general insurance business were $53.8 billion (increased by 4.7%) and $34.7 billion (increased by 3%) respectively, against which total gross claims of $22.8 billion (increased by 5.6%) were paid out. The overall underwriting profit reduced markedly from $3.4 billion to $1.5 billion.

On direct business, the gross and net premiums were $39.6 billion (increased by 5.4%) and $27.9 billion (increased by 5%) respectively. The gross premiums of Accident & Health business were $15.4 billion (increased by 13%), benefiting from recovery in travel business of the non-medical subclass as well as new coverages and higher rates for the medical subclass. Motor Vehicles business and Property Damage business reported gross premiums of $4 billion (increased by 6.9%) and $4.9 billion (increased by 7.4%) respectively, partly offset by the 12.3% reduction in gross premiums of Pecuniary Loss (comprising Mortgage Guarantee) business to $2.8 billion amid a tepid property market.

Direct business generated overall underwriting profit of $649 million (decreased by 68.3%), with the net claims incurred ratio rising from 57.2% to 62.2%. This is mainly due to adverse claims experience recorded in Accident & Health business and General Liability (comprising Employees’ Compensation) business arising from full resumption of economic activities. Meanwhile, the underwriting result of Property Damage business faced pressure from the severe weather events occurring in September 2023.

On reinsurance inward business, the gross and net premiums were $14.2 billion (increased by 2.9%) and $6.8 billion (decreased by 4.7%) respectively, propelled by Property Damage business but dragged down by Accident & Health business and General Liability business. The overall underwriting profit shrank by 35.7% to $870 million, as the fall of Property Damage business and Pecuniary Loss business outweighed improvement in General Liability business. Moreover, the net claims incurred ratio edged up from 47.3% to 48.6%.

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 $118.6 billion, as well as other claims and benefits of $121.1 billion.