Insurance Authority

11/30/2022 | Press release | Distributed by Public on 11/30/2022 01:37

Insurance Authority releases provisional statistics of Hong Kong insurance industry in the first three quarters of 2022

Insurance Authority releases provisional statistics of Hong Kong insurance industry in the first three quarters of 2022

30 November 2022

The Insurance Authority (IA) today (30 November 2022) released provisional statistics of the Hong Kong insurance industry for the first three quarters of 2022, showing a decrease of total gross premiums by 5.1% to $432.7 billion over the corresponding period in 2021.

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


Long term business

Total revenue premiums of in-force long term business were $381.4 billion in the first three quarters of 2022 (decreased by 6.3%), mainly comprising $320.1 billion from Individual Life and Annuity (Non-Linked) business (decreased by 4.6%), $21.9 billion from Individual Life and Annuity (Linked) business (decreased by 31.8%), as well as $34.4 billion from Retirement Scheme business (decreased by 1.1%). Furthermore, total amount of payment made to policy holders in terms of claims and benefits was $223.2 billion1 (decreased by 8.4%).

During the same period, new office premiums (excluding Retirement Scheme business) of long term business were $112.2 billion (decreased by 8.4%), made up of $99.9 billion from Individual Life and Annuity (Non-Linked) business (decreased by 0.4%) and $11.9 billion from Linked business (decreased by 45.9%). Around 23,000 Qualifying Deferred Annuity Policies were issued, attracting $1.5 billion in terms of premiums that represent 1.4% of the total for individual businesses.

New business premiums derived from Mainland visitors were $1 billion (increased by 110.9%), representing 0.9% of the total for individual businesses. The significant upturn is caused by impact of isolated transactions and a relatively low base of comparison for the same period in 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 35%, 32% and 23% of the policies respectively.


General business

In the first three quarters of 2022, the gross and net premiums of general insurance business were $51.4 billion (increased by 5.3%) and $33.7 billion (increased by 2.8%) respectively, against which payment of total gross claims was $21.6 billion (decreased by 4.6%). The overall underwriting results accelerated from $1.2 billion to $3.4 billion.

On direct business, the gross and net premiums were $37.6 billion (increased by 2.3%) and $26.6 billion (increased by 1%) respectively. The growth in gross premiums was mainly contributed by Accident & Health business and General Liability (comprising Employees' Compensation) business, risen by $0.8 billion (6.1%) and $0.7 billion (7.2%) respectively on the back of rates hardening and new business. This was partially offset by a reduction of $0.4 billion in Ships business due to the substituting effect of reinsurance inward business and a decline of $0.3 billion in Pecuniary Loss business resulted from lesser loan drawdowns under the Mortgage Insurance Programme.

Direct business generated overall underwriting profit of $2 billion (increased by 137.2%), as the net claims incurred ratio improved from 61.5% to 57.2%. With rising premiums and better claims experience, General Liability (comprising Employees' Compensation) business reported a strong underwriting result of $1.2 billion (increased by 120.7%). Pecuniary loss business saw a notable surge in profit of $0.4 billion (increased by 1,823%), attributable to diminishing mismatch of upfront commissions and long-tailed premiums of mortgage insurance plans. Property Damage business also registered profit of $0.3 billion (decreased by 19.2%).

On reinsurance inward business, the gross and net premiums were $13.8 billion (increased by 14.3%) and $7.1 billion (increased by 10.3%) respectively. The key drivers were Ships business (increased by 159.5%) due to the substitution of direct business by reinsurance inward business, coupled with new business from Accident & Health (increased by 44.7%) and Pecuniary Loss business (increased by 25.4%). The overall underwriting results went up from $0.4 billion to $1.4 billion, as the net claims incurred ratio lowered from 62.1% to 47.3%, thanks to better claims experience in Property Damage business, Pecuniary Loss business and General Liability business.

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

Ends

Note:

1 Including lapse/surrender benefits of $91.2 billion, other claims and benefits of $132 billion.