31 August 2021
The Insurance Authority (IA) today (31 August 2021) released provisional statistics of the Hong Kong insurance industry for the first half of 2021, showing a decline of total gross premiums by 2.2% to $307 billion over the corresponding period of 2020, resulting again from the premium payment pattern embedded in some short-term endowment products.
(Percentage figures shown in brackets represent year-on-year changes)
Long term business
Total revenue premiums of in-force long term business were $273.6 billion in the first half of 2021 (decreased by 2.4%), mainly comprising $226.2 billion from Individual Life and Annuity (Non-Linked) business (decreased by 4.9%), $20.2 billion from Individual Life and Annuity (Linked) business (increased by 59.2%), as well as $23.9 billion from Retirement Scheme business (decreased by 8.4%).
On the other hand, new office premiums (excluding Retirement Scheme business) of long term business were $80.5 billion (increased by 22.9%), made up of $67 billion from Individual Life and Annuity (Non-Linked) business (increased by 10.3%) and $13.4 billion from Linked business (increased by 192.2%). This positive outturn should nonetheless be viewed carefully against a low base of comparison in 2020. During the first half of 2021, some 31,000 Qualifying Deferred Annuity Policies were issued that attracted $2.2 billion in terms of premiums, representing 2.7% of the total for individual businesses.
New business derived from Mainland visitors shrank from $6.2 billion in the first half of 2020 to around $200 million in the corresponding period of 2021 (decreased by 96.5%), representing 0.3% of the total for individual businesses. About 97% of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premiums). Critical illness, whole life and medical insurance accounted for 38%, 33% and 20% of the policies respectively.
General business
In the first half of 2021, the gross and net premiums of general insurance business were $33.4 billion (decreased by 0.3%) and $22.1 billion (decreased by 3%) respectively, with the overall underwriting profit improving from $624 million to $794 million.
On direct business, the gross and net premiums were $25.1 billion (increased by 2.1%) and $17.7 billion (increased by 4.3%) respectively. Similar to last year, Pecuniary Loss business saw a massive growth of 39.1% riding on the upward adjustment of maximum property values under the Mortgage Insurance Programme. The gross premiums of Property Damage business and General Liability (Others) business also went up by 5.9% and 15.9% respectively, but Accident & Health business dropped 6.4% since hindrance on outbound travel caused the Non-medical subclass to plunge by 33.1%. Employees’ Compensation business ebbed by 5.5% due to subdued economic activities amidst COVID-19.
Direct business generated an overall underwriting profit of $757 million (no significant change), as underwriting profits of Property Damage business and Pecuniary Loss (Others) business reached $292 million (increased by 58.1%) and $121 million (increased by 571%) respectively. Accident & Health business recorded an underwriting profit of $291 million (decreased by 40.7%), indicating the resurgence of claims suppressed or deferred by COVID-19.
On reinsurance inward business, the gross and net premiums were $8.3 billion (decreased by 7%) and $4.4 billion (decreased by 24.4%) respectively. The outcome was largely dragged down by Motor Vehicle business, partially offset by better results coming out of Accident & Health business and Property Damage business. The overall underwriting performance recovered from a loss of $132 million to a profit of $37 million despite the impact of claims on Property Damage business, whose underwriting performance deteriorated from a profit of $128 million to a loss of $198 million.
A summary of the provisional statistics is provided at Annex , and further details could be obtained at the IA website .
Ends