June 10, 2023


Be life confident

Hong Kong insurance premiums skyrocket

3 min read

The Insurance Authority (IA) revealed that for the first quarter of 2020, the total gross premiums of the Hong Kong insurance industry grew by 10.9{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} year on year to HK$165 billion.

According to the regulator, total revenue premiums of in-force long-term business were HK$146.7 billion, up 11{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} year on year. This was mainly comprised of HK$124.4 billion of individual life and annuity (non-linked) business, HK$6.4 billion of individual life and annuity (linked) business, and HK$13.9 billion of retirement scheme business, the last of which increased by 72.7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} year on year.

New office premiums (excluding retirement scheme business) of long term business were HK$35.1 billion, down by 27.5{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}.

A year after the launch of the Qualifying Deferred Annuity Policy (QDAP), the IA said that around 133,000 such policies had been sold, for a total of HK$9.4 billion in premiums. The average age of policyholders was 47.5, while the average annualised premiums per policy were around HK$71,000.

New office premiums for policies sold to visitors from Mainland China were HK$5.4 billion, down by 57.7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from the same period from last year. Restrictions imposed on cross-boundary travel to contain the COVID-19 outbreak caused premiums to contract by 27{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} on a quarterly basis, the IA said. Critical illness, whole life, and medical products were the most popular products taken out by Mainland visitors. About 98{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of policies were settled at regular intervals, i.e. non-single premiums.

Read more: Hong Kong insurance industry posts significant growth in premiums

Meanwhile, gross and net premiums of the general insurance business were HK$18.3 billion (increased by 10.1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}) and HK$12.2 billion (increased by 7.4{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}) respectively. Overall underwriting profit rose from HK$44 million to HK$329 million, driven by improved performance of direct business and a significant turnaround in reinsurance inward business.

Direct business generated an underwriting profit of HK$304 million, up by 4.2{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, with accident & health showing a profit of HK$177 million, up 79.4{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, due to lower claims amid the COVID-19 outbreak. Employees’ compensation business made a turnaround, from a loss of HK$14 million to a profit of HK$39 million, and the loss in the motor vehicle business improved slightly from HK$48 million to HK$31 million. However, the IA expects the economic downturn and volatile investment environment will put mounting pressure on the industry going forward.

On reinsurance inward business, gross and net premiums were HK$4.3 billion, up by 12.9{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, and $2.8 billion, up 11.1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, respectively, accelerated by capacity tightening and the hardening of rates. The underwriting result made a strong rebound from a loss of HK$248 million to a profit of HK$25 million, which was attributed by the IA to favourable claims experience in general liability business and goods in transit business.

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