11/30/2022 | Press release | Distributed by Public on 11/30/2022 01:37
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.
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.
1 Including lapse/surrender benefits of $91.2 billion, other claims and benefits of $132 billion.