Insurance Authority releases Q1 statistics for Hong Kong industry

Premium income sees slight dip

Insurance Authority releases Q1 statistics for Hong Kong industry

Insurance News

By Gabriel Olano

Hong Kong’s insurance industry saw its total gross premiums decline by 4.6% year on year to HK$157.4 billion (SG$26.8 billion) in the first quarter of 2021, according to provisional statistics released by the Insurance Authority (IA).

The IA attributed the dip to a temporary impact caused by the premium payment pattern embedded in some short-term endowment products.

For long-term business, total revenue premiums of in-force long policies were HK$139.1 billion (down by 5.2% year on year). This was comprised of HK$113.3 billion from individual life and annuity (non-linked) business (decreased by 8.9%), HK$9.5 billion from individual life and annuity (linked) business (increased by 48.4%), and HK$14.4 billion from retirement scheme business (increased by 3.6%).

Travel restrictions have caused new business from visitors from mainland China to plunge by 98% to HK$100 million from HK$5.4 billion during the first quarter of 2020.

The general insurance side remained relatively stable, with gross premiums at HK$18.3 billion at no significant change from last year. Net premiums decreased by 2.2% to HK$11.9 billion, while overall underwriting profit rose from HK$329 million to HK$512 million.

Premiums of most types of general insurance decreased slightly or remained stagnant, with pecuniary loss business an exception, with solid growth of 36.3%, riding on the upward adjustment of maximum property values under the mortgage insurance programme. Meanwhile, gross premiums of property damage business and ships business grew by 15.2% and 10.5%, respectively.

Due to a lower number of claims, accident & health business and employees’ compensation business generated underwriting profits of HK$211 million and HK$113 million respectively. The motor vehicle business also returned a profit of HK$6.8 million after multiple challenging years.

Reinsurance inward business had gross and net premiums of HK$4.3 billion (down 1.7%) and HK$2.2 billion (down 22.3%) respectively.

The growth in property damage business and general liability business, which the IA said was due to rates hardening and additional demands, was fully offset by reduction in motor vehicle business.

Meanwhile, overall underwriting profit surged from HK$24.7 million to HK$117 million, with the primary contribution from motor vehicle business partially attenuated by deterioration of property damage business from a profit of HK$146 million to a loss of HK$94 million.

IA urges insurance professionals to get vaccinated

The regulator has issued a circular, which strongly advises companies in the insurance industry to arrange for their staff, especially those who are regularly in contact with customers, to get inoculated against COVID-19.

This, the IA said, is in keeping with sound risk management practices and robust business continuity plans. To support its staff, the IA will grant paid leave of up to two days to those taking the COVID-19 vaccine.

“The insurance industry has shown tremendous resilience in the face of severe operational challenges, prolonged social distancing and unprecedented market volatilities,” said Clement Cheung, IA chief executive. “To ensure an early resumption of normalcy and speedy economic recovery, we urge stakeholders to take part in a collective effort to increase the vaccination rate in the territory.”   

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!