Hong Kong’s market grew 9% in 2019 amid protests

March 16 2020 by Yvonne Lau

Total gross premiums for the Hong Kong market in 2019 grew to HK$580.2 billion (US$74.6 billion), a 9.1% increase from 2018 when premiums were HK$531.7 billion (US$68.3 billion), according to the Hong Kong Insurance Authority.

This is another consecutive year of growth for the local market, despite political and economic instability that began in the latter half of 2019. In 2018, premiums saw an 8.6% jump from 2017 figures.

Revenue premiums from long-term in-force business stood at HK$524.6 billion (US$67.4 billion), an increase of 9.7%. The majority was due to individual life and annuity (non-linked business) which increased by 15.3% to HK$457.1 billion (US$58.7 billion), in addition to HK$27.7 billion (US$3.5 billion) of individual life and annuity (linked) business and HK$33.8 billion (S$4.3 billion) of retirement scheme business.

The civil unrest that began in the summer of last year contributed to a heavy hit pertaining to new premiums and policies from mainland visitors – this segment decreased by 8.8% to HK$43.4 billion (US$5.58 billion). The third and fourth quarters of 2019 were the hardest hit with a 28.8% and 23.4% decline, respectively.

On the general insurance side, gross and net premiums both saw growth – with the former increasing by 3.9% to HK$55.7 billion (US$7.1 billion), and the latter increasing by 6.8% to HK$37.7 billion (US$4.8 billion). Overall underwriting profit surged to HK$1.1 billion (US$ 141.4 million) – a 93.3% jump – due to the absence of major typhoons and a resulting boost to the property damage sector.

As of December 31 2019, gross and net claims incurred by insurers due to recent unrest stood at HK$1.3 billion (US$167 million) and HK$411 million (US$52.8 million), respectively; but “upward adjustment of reserves is likely to impair underwriting performance going forward,” notes the HKIA.

Direct business netted HK$42.4 million (US$ ) in gross premiums, translating to HK$29.5 billion (US$ ) in net premiums. Accident and health was the “largest driving force” in this business, followed by general liability, property damage and marine.

Reinsurance inward business saw HK$13.3 billion (US$1.7 billion  in gross premiums, meaning HK$8.2 billion (US$1 billion) in net premiums; a decrease of 12.5% and 18.4%, respectively. General liability sectors saw a huge drop in gross premiums by 48% to HK$1.9 billion (US$244.3 million), which was partly offset by the property damage segment which saw an 8.5% increase in gross premiums to HK$5.3 billion (US$681.5 million).

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