Hong Kong insurance industry grows by 12.3% in 1Q

Hong Kong insurance industry grows by 12.3% in 1Q | Insurance Business Asia

Hong Kong insurance industry grows by 12.3% in 1Q

Hong Kong’s Insurance Authority (IA) has released statistics on the city’s insurance industry for the first quarter of 2019. Total gross premiums reached HK$148.8 billion (US$18.90 billion), or an increase of 12.3% year-on-year.

Long-term business had total premiums of HK$132.2 billion in the first quarter of 2019, up by 13% year-on-year. Revenue premiums of individual life and annuity (non-linked) business were HK$115.9 billion, up 16.2%, while those of individual life and annuity (linked) business amounted to HK$6.6 billion (down by 21.7%). Contributions to retirement schemes totalled HK$8.1 billion, an 11.3% increase.

Premiums of policies issued to mainland Chinese visitors totalled HK$12.8 billion, or 7.9% higher than the same period last year. This accounted for 26.4% of the total new office premiums for individual business, the IA said. Among these new policies, around 96% 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.

Read more: Hong Kong insurance premiums grow 8.6% in 2018

The gross and net premiums of general insurance business in the first quarter were HK$16.6 billion (up 7%) and HK$11.4 billion (up 7.7%) respectively. Overall underwriting performance turned from a loss of HK$166 million in the first quarter of 2018 to a profit of HK$44 million in the first quarter of 2019.

Accident and health insurance continued to be the major contributor to premium growth, the regulator said.  Fuelled by several newly authorised insurers, marine insurance business also showed strong growth, with gross premiums reaching HK$1.6 billion (up 25.5%) in the first quarter of 2019.

General liability business, including employees’ compensation insurance, made a huge turnaround –  from a loss of HK$42 million to a profit of HK$88 million, which the IA attributed to an improved claims experience. Accident and health business also turned from a loss of HK$3 million to a profit of HK$99 million, mainly driven by premium growth. Meanwhile, underwriting profit for property insurance declined by 58.8% to HK$74 million, due to reserve adjustment for typhoon related claims. Underwriting performance for motor insurance decreased by 58.3% year-on-year, to a loss of HK$49 million, due to deteriorating claims experience and claims reserve strengthening.

As for reinsurance inward business, gross and net premiums stood at HK$3.8 billion and HK$2.5 billion respectively in the first quarter of 2019, roughly unchanged from the same period last year. Underwriting performance recorded a loss of HK$248 million, an improvement of 25.6% compared with the corresponding period of 2018.  Due to improved claims experience, the underwriting profit of property damage business increased by 130.5% to HK$179 million in the first quarter of 2019.