Hong Kong’s market robust in first nine monthsDecember 4 2019 by Yvonne Lau
Despite a turbulent period, the Hong Kong market for the first three quarters of 2019, grew by 12.5% from 2018 – meaning a total of HK$436.9 billion (around US$55.8 billion) in total gross premiums, according to provisional statistics released by the Hong Kong Insurance Authority (IA).
In 2018, total gross premiums stood at HK$388.3 billion (around US$49.5 billion) at the end of September, which was a 6.9% increase from 2017.
Despite being rocked by months of protests, the first nine months of the year still recorded a 5.5% increase in the share of new office premiums in respect of policies issued to mainland Chinese visitors.
The most popular policies were critical illness, whole life and medical products. In 2018, this figure totalled HK$34.1 billion (US$4.3 billion), which was a decrease from the previous year of 15.8%.
Hong Kong in the first six months of this year saw an increase in tourist arrivals of 14% over 2018. Only as of July, August and September did the numbers start to drop; 78% of tourists in Hong Kong are from China.
General insurance business in this period saw an upward trend – gross premiums increased by 9.5% to HK$44.4 billion (US$5.6 billion) and net premiums by 8.1% to HK$30.3 billion (US$3.8 billion). Overall underwriting performance recorded a HK$856 million (US$109 million) profit – a whopping 883.9% increase – attributed mainly to property damage business – in part reflecting a benign typhoon season.
The total revenue premiums of long-term in-force business grew 12.9% to HK$392.5 billion (US$50 billion) – revenue premiums of individual life and annuity (non-linked) business also grew, by 19.3% to HK$341.7 billion (US$43.6 billion).
However, individual life and annuity (linked) business decreased, by 20.5% to HK$20.5 billion (US$2.6 billion); and contributions of retirement scheme business also contracted, by 18.5% to HK$25.7 billion (US$3.2 billion).
Direct business saw gross premiums of HK$33.9 billion US$4.3 billion), an 11.1% increase; net premiums of $23.9 billion (US$3 billion), a 10.5% increase; and an underwriting profit of HK$736 million (US$94 million), an increase of 160.7%. Accident and health contributed gross premiums of HK$14 billion (US$1.7 billion), a 10.1% increase; and general liability contributed HK$8.5 billion (US$1 billion), a 14.2% increase.
On reinsurance inward business, gross premiums stood at HK$10.5 billion (US$1.3 billion), a 4.5% increase; and net premiums at HK$6.4 billion (US$817.5 million), a 0.1% increase. Underwriting performance significantly increased to a HK$120 million (US$15.3 million) profit – following last year’s HK$195 million (US$24.9 million) loss.
The IA’s report notes that the “recent social events are likely to bring about a negative outlook going forward.”
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