HK regulator releases provisional sector figures
The Insurance Authority (IA) has released provisional statistics of the Hong Kong insurance industry for 2021, showing a mild decrease of total gross premiums by 0.9 percent to HKD602.7 billion over 2020.
Total revenue premiums of in-force long term business were HKD540.8 billion in 2021 (decreased by 1.3 percent), mainly comprising HKD446.6 billion from Individual Life and Annuity (Non-Linked) business (decreased by 3.7 percent), HKD44.6 billion from Individual Life and Annuity (Linked) business (increased by 61 percent), as well as HKD43.9 billion from Retirement Scheme business (decreased by 13.4 percent). Total amount of payment made to policy holders in terms of claims and benefits was HKD307.1 billion1 (increased by 25.7 percent).
On the other hand, new office premiums (excluding Retirement Scheme business) of long term business were HKD166.8 billion (increased by 25 percent), made up of HKD135.6 billion from Individual Life and Annuity (Non-Linked) business (increased by 12.8 percent) and HKD30.8 billion from Linked business (increased by 140.7 percent). Around 47,000 Qualifying Deferred Annuity Policies were issued, attracting HKD3.5 billion in terms of premiums that represent 2.1 percent of the total for individual businesses
New business derived from Mainland visitors shrank from HKD6.8 billion in 2020 to about HKD688 million in 2021 (decreased by 89.9 percent), representing 0.4 percent of the total for individual businesses. Some 96 percent of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premium). Critical illness, whole life and medical insurance accounted for 38 percent, 33 percent and 19 percent of the policies respectively
In 2021, the gross and net premiums of general insurance business were HKD61.8 billion (increased by 2.6 percent) and HKD41.5 billion (increased by 1.4 percent) respectively, against which total gross claims payment was HKD31.4 billion (increased by 2.3 percent). The overall underwriting profit dropped from HKD2,232 million to HKD1,958 million.
On direct business, the gross and net premiums were HKD46.1 billion (increased by 3.9 percent) and HKD33 billion (increased by 5.6 percent) respectively. Pecuniary Loss business sustained a high growth of 33.5 percent to HKD4.6 billion in gross premiums, fueled by upward adjustment of maximum property values under the Mortgage Insurance Programme. Property Damage business, General Liability (Others) business and Ships business also went up by 5.5 percent, 9.3 percent and 10.7 percent respectively. However, the gross premiums of Accident & Health business fell 2.3 percent, within which the Medical subclass stayed flat and the Non-medical subclass tumbled by 20.8 percent as outbound travel remained hampered.
Direct business generated an overall underwriting profit of HKD1,336 million (decreased by 19.1 percent) as the net claims incurred ratio rose from 58.9 percent to 61 percent, which underlies the deteriorated performance of Accident & Health business from a profit of HKD973 million to a loss of HKD58 million. This was partially offset by positive results achieved by Property Damage business, General Liability business and Pecuniary Loss business with underwriting profits at HKD577 million (increased by 15.6 percent), HKD979 million (increased by 42.8 percent) and HKD41 million (from a loss of HKD191 million) respectively.
On reinsurance inward business, gross and net premiums were HKD15.7 billion (decreased by 1.2 percent) and HKD8.4 billion (decreased by 12.3 percent) respectively as the contraction of Motor Vehicle business outweighed an expansion in Property Damage business and Accident & Health business. Nonetheless, the overall underwriting performance rose from HKD582 million to HKD622 million, mainly contributed by a lowering of the net claims incurred ratio from 62.2 percent to 59.8 percent.
