Insurance Authority releases provisional statistics of Hong Kong insurance industry in the first quarter of 2022

31 May 2022
 

The Insurance Authority (IA) today (31 May 2022) released provisional statistics of the Hong Kong insurance industry for the first quarter of 2022, showing a mild increase of total gross premiums by 0.5% to $158.2 billion over the corresponding period in 2021.

(Percentage figures shown in brackets represent year-on-year changes)

Long term business

Total revenue premiums of in-force long term business were $138.9 billion in the first quarter of 2022 (decreased by 0.2%), mainly comprising $113.3 billion from Individual Life and Annuity (Non-Linked) business (increased by 0.1%), $7.9 billion from Individual Life and Annuity (Linked) business (decreased by 17%), as well as $15.8 billion from Retirement Scheme business (increased by 9.2%). Total amount of payment made to policy holders in terms of claims and benefits was $71.6 billion¹ (decreased by 4.1%).

On the other hand, new office premiums (excluding Retirement Scheme business) of long term business were $42.4 billion (increased by 4.2%), made up of $37.7 billion from Individual Life and Annuity (Non-Linked) business (increased by 10.1%) and $4.6 billion from Linked business (decreased by 27.2%). Around 12,000 Qualifying Deferred Annuity Policies were issued, attracting $830 million in terms of premiums that represent about 2% of the total for individual businesses.

New business premiums derived from Mainland visitors were $345 million (increased by 235% against a low base of comparison in the first quarter of 2021), representing 0.8% of the total for individual businesses. Some 96% of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premium). Critical illness, medical and whole life insurance accounted for 31%, 31% and 28% of the policies respectively.

General business

In the first quarter of 2022, the gross and net premiums of general insurance business were $19.3 billion (increased by 5.8%) and $12 billion (increased by 0.1%) respectively, against which total gross claims payment was $7.2 billion (decreased by 0.9%). The overall underwriting profit rose sharply from $512 million to $1,063 million.

On direct business, the gross and net premiums were $14.2 billion (increased by 1.5%) and $9.6 billion (decreased by 1.1%) respectively. General Liability (comprising Employees’ Compensation) business and Pecuniary Loss (Others) business grew by 9.2% and 32.8% respectively, supported by rates hardening and new business, partly offset by reduction in Ships business and Motor Vehicles business of 4.5% and 4.9% respectively.

Direct business generated an overall underwriting profit of $965 million (increased by 144%), with the net claims incurred ratio falling from 59.3% to 54.5%, mainly caused by favourable outcome in Ships business and General Liability (comprising Employees’ Compensation) business. Despite this visible improvement, the underwriting profit of Accident & Health business narrowed from $211 million to $151 million, but still compares well with a loss of $58 million in the fourth quarter of 2021.

On reinsurance inward business, the gross and net premiums were $5.1 billion (increased by 20%) and $2.3 billion (increased by 5.5%) respectively. The increment of gross premiums was led by Ships business, Property Damage business and Accident & Health business, attributable again to rates hardening and new business. Nevertheless, the overall underwriting profit dropped from $117 million to $98 million, with the net claims incurred ratio edging up from 61.2% to 61.5%.

A summary of the provisional statistics is provided at Annex, and further details could be obtained at the IA website.

Ends

Note:

¹  Including lapse/surrender benefits of $27.5 billion, other claims and benefits of $44.2 billion.