HK insurance industry shrinks in first nine months of 2022

Overall result weakens despite improvement in key metric

HK insurance industry shrinks in first nine months of 2022

Insurance News

By Gabriel Olano

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.


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