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Market performance of Hong Kong insurance industry for the first three quarters of 2017


29 November 2017


The Insurance Authority (IA) today (29 November 2017) released provisional statistics of the Hong Kong insurance industry for the first three quarters of 2017.

Total gross premiums of the Hong Kong insurance industry in the first three quarters of 2017 amounted to $363.2 billion, representing an increase of 11% over the corresponding period in 2016.

Long term business

The total amount of revenue premiums of in-force business was $325.4 billion in the first three quarters of 2017, with a year-on-year increase of 11.6%. Revenue premiums of Individual Life and Annuity (Non-Linked) business increased by 13% to $280 billion, while those of Individual Life and Annuity (Linked) business increased by 12.2% to $23.4 billion. Contributions of Retirement Scheme business decreased by 4.6% to $18.2 billion.

For new business, new office premiums (excluding Retirement Scheme business) of long term business for the first three quarters of 2017 recorded a year-on-year decrease of 12% to $116.6 billion. New office premiums of Individual Life and Annuity (Non-Linked) business decreased by 16.9% to $106.8 billion. On the other hand, those of Individual Life and Annuity (Linked) business increased by 160.2% to $9.1 billion.

With a view to enhancing transparency and facilitating comprehensive and objective analyses, the IA had earlier requested insurers to provide more detailed statistics on policies issued to Mainland visitors for period starting from year 2016.

New office premiums for policies issued to Mainland visitors saw a declining trend, from $23.7 billion in the fourth quarter of 2016 to $10.1 billion in the third quarter of 2017.

About 95% of the policies issued to Mainland visitors were medical or protective in nature, such as critical illness, medical, whole life, term life and annuity products. In terms of premium payment pattern, about 99% of the policies were paid at regular intervals, i.e. non-single premiums.

"In general, consumers who take out medical or protective types of policies and pay premiums at regular intervals are looking for long-term protection instead of seeking short-term investment returns," an IA spokesperson said.

General business

In the first three quarters of 2017, gross and net premiums of general insurance business recorded a growth of 5.8% to $37.8 billion and 5.1% to $26 billion respectively compared with the corresponding period in 2016. Overall underwriting performance recorded a loss of $193 million due to a combination of Typhoon Hato related loss reported under Property Damage business as well as underwriting loss reported under Employees' Compensation and Motor Vehicle businesses.

On direct business, gross and net premiums increased by 2.8% to $28.6 billion and 1.2% to $20.1 billion respectively in the first three quarters of 2017 compared with the corresponding period in 2016, mainly driven by Accident & Health business (comprising Medical business) which recorded a growth in gross premiums from $10.6 billion to $11.6 billion.

The underwriting profit of direct business decreased to $338 million in the first three quarters of 2017 from $943 million in the corresponding period in 2016, mainly attributable to deteriorating underwriting performance of Motor Vehicle business and Property Damage business. The underwriting loss of Motor Vehicle business worsened from $138 million to $304 million. As for Property Damage business, it recorded a drop in underwriting profit from $358 million to $65 million respectively.

On reinsurance inward business, gross and net premiums increased from $7.9 billion and $4.8 billion to $9.2 billion and $5.9 billion respectively in the first three quarters of 2017 compared with the corresponding period in 2016. Due to adverse claims experience, the underwriting performance recorded a loss of $531 million.

A summary of provisional statistics of the Hong Kong insurance business for the first three quarters of 2017 is in the annex . Further details can be downloaded on the IA website.

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