8 March 2024
The Insurance Authority (IA) today (8 March 2024) released provisional statistics of the Hong Kong insurance industry for 2023, showing a decrease of total gross premiums by 1.1% to $549.7 billion over 2022.
(Percentage figures shown in brackets represent year-on-year changes)
Long term business
Total revenue premiums of in-force long term business were $482.4 billion in 2023 (decreased by 1.8%), mainly comprising $423.4 billion of Individual Life and Annuity (Non-Linked) business (increased by 2.6%), $23.6 billion of Individual Life and Annuity (Linked) business (decreased by 16.8%), as well as $29.3 billion of Retirement Scheme business (decreased by 34.3%). This outcome was largely attributable to isolated transactions of Retirement Scheme business that took place in 2022. Meanwhile, the total claims and benefits paid to policy holders amounted to $332.4 billion1 (increased by 11.6%).
New office premiums (excluding Retirement Scheme business) of long term business were $181 billion (increased by 34.2%), made up of $169.4 billion from Individual Life and Annuity (Non-Linked) business (increased by 41.8%) and $11.2 billion from Individual Life and Annuity (Linked) business (decreased by 25.1%). Around 30,000 Qualifying Deferred Annuity Policies were issued, attracting $1.9 billion in terms of premiums that represent 1.1% of the total for individual businesses.
Following a moderation of 32.9% in the third quarter against the preceding quarter, new business premiums derived from Mainland visitors reduced further by 18.9% in the fourth quarter to $12.1 billion. For 2023 as a whole, $59 billion was recorded for this group of customers that represents 32.6% of the total for individual businesses. Around 97% of the policies were settled at regular intervals (i.e. non-single premium), with whole life, critical illness and medical insurance accounting for 55%, 34% and 4% of the policies respectively.
General business
Total gross and net premiums of general insurance business in 2023 were $67.3 billion (increased by 4.1%) and $43.3 billion (increased by 2.7%) respectively, against which total gross claims of $32.1 billion (increased by 6.8%) were paid. The overall underwriting profit went down from $4.2 billion to $0.8 billion.
On direct business, the gross and net premiums were $49.2 billion (increased by 4.5%) and $34.3 billion (increased by 3.4%) respectively. The gross premiums of Accident & Health business reached $18.9 billion (increased by 13.2%), driven by a surge in demand for travel insurance and group medical business. Motor Vehicles business and Property Damage business reported gross premiums of $5.2 billion (increased by 5.1%) and $6.1 billion (increased by 6.5%) respectively. The growth was partially offset by a drop in gross premiums of Pecuniary Loss (comprising Mortgage Guarantee) business to $3.3 billion (decreased by 21%) due to the lukewarm property market.
Direct business generated an overall underwriting profit of $0.1 billion (decreased by 95.4%), with the net claims incurred ratio advancing from 58.1% to 64.1%. This reflects mainly the negative performance of Accident & Health business, Property Damage business and Pecuniary Loss business caused by emergence of latent medical claims and full resumption of economic activities after the pandemic, the extreme weather conditions in September 2023 and reserve adjustment for reverse mortgage insurance. Nonetheless, a confluence of the same factors is unlikely in 2024.
On reinsurance inward business, the gross and net premiums were $18.1 billion (increased by 3.1%) and $8.9 billion (increased by 0.2%) respectively. The growth in gross premium came from Property Damage business and Accident & Health business, partly offset by shrinkage of General Liability business and Pecuniary Loss business. As the net claims incurred ratio rose from 44.6% to 55.8%, the overall underwriting profit declined 61.7% to $0.7 billion.
A summary of the provisional statistics is provided at Annex, and additional details can be obtained at the IA website.
Ends
Note:
1 Including lapse/surrender benefits of $160.4 billion, other claims and benefits of $172 billion.