HK insurance industry shrinks in first nine months of 2022

HK insurance industry shrinks in first nine months of 2022 | Insurance Business Asia

HK insurance industry shrinks in first nine months of 2022

The Hong Kong insurance industry registered a 5.1% decrease in total gross premiums to HK$432.7 billion (SG$75.7 billion) for the first nine months of 2022, the city’s Insurance Authority (IA) said.

For long-term business, total revenue premium of in-force business was HK$381.4 billion, down 6.3% year on year. Of that, HK$320.1 billion was from individual life and annuity (non-linked) business (down 4.6%), HK$21.9 billion from Individual life and annuity (linked) business (down 31.8%), and HK$34.4 billion from retirement scheme business (down 1.1%).

Insurers in the long-term segment paid out HK$223.2 billion in claims and benefits, down 8.4% from the same period last year.

New business premiums derived from Mainland visitors grew by 110.9% to HK$1 billion, representing 0.9% of total premiums. According to the IA, the surge in premiums is caused by the impact of isolated transactions and a relatively low base of comparison from last year. Around 95% of policies taken out by Mainland visitors were non-single premium products. Whole life, critical illness and medical insurance accounted for 35%, 32% and 23% of the policies, respectively.

The general insurance segment performed better, with gross premiums growing by 5.3% to HK$51.4 billion and net premiums increasing by 2.8% to HK$33.7 billion. Insurers paid out HK$21.6 billion in claims, a decrease of 4.6% from last year. Overall underwriting results improved from HK$1.2 billion to HK$3.4 billion.

Direct general business generated an overall underwriting profit of HK$2 billion, an increase of 137.2% from the same period last year. According to the IA, this was influenced by an improvement in the net claims incurred ratio – from 61.5% to 57.2%. With rising premiums and better claims experience, general liability (including employees’ compensation) reported a strong underwriting result of HK$1.2 billion, up 120.7%.

Reinsurance inward business reported the gross and net premiums of HK$13.8 billion (up 14.3%) and HK$7.1 billion (up 10.3%), respectively. The IA said the segment’s key drivers were marine, accident and health, and pecuniary loss businesses. The segment’s overall underwriting results improved from HK$400 million to HK$1.4 billion, as the net claims incurred ratio improved from 62.1% to 47.3%. According to the IA, this was due to better claims experience in property damage, pecuniary loss and general liability businesses.