Hong Kong premium growth slows down following COVID-19 crisis

One of the largest declines this half was that of new office premiums generated from mainland visitors, which dropped by 76.3{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to HK$6.2 billion, due to movement restrictions between Hong Kong and the mainland.

For long-term business, total revenue premiums for in-force policies were at HK$280.3 billion, up 5.6{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}. However, new sales dropped by 34.4{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, with new office premiums (excluding retirement scheme business) at HK$65.5 billion.

As for the general insurance segment, gross and net premiums in the first half of 2020 were HK$33.5 billion (increased by 9.7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}) and HK$22.8 billion (increased by 8.8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}) respectively, the IA said. The overall underwriting profit rose from HK$432 million to HK$624 million, driven by direct business.

The reinsurance segment saw increases in both gross and net premiums, at HK$8.9 billion (increased by 23.8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}) and HK$5.8 billion (increased by 25.4{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}) respectively, propelled by property damage business. According to the IA, the segment’s underwriting result stayed relatively flat, compared with the corresponding period of last year and recorded a loss of HK$132 million.

The regulator indicated that the pandemic’s negative impact on the insurance industry is not yet over.

“With the COVID-19 pandemic showing no abatement, its impact on premiums and profitability will become more evident in the coming quarters,” it said.