Hong Kong’s Insurance Authority (IA) has released its interim numbers for the first half of 2023, disclosing a 1.4% decline in total gross premiums to HK$295.7 billion.
The in-force long term business’ total revenue premiums decreased by 2.2% to HK$258.7 billion and include the following lines:
- Individual life and annuity (non-linked) – HK$227.5 billion (3.1% increase)
- Individual life annuity (linked) – HK$12.7 billion (15.9% decrease)
- Retirement scheme – HK$14.8 billion (41.1% decrease)
During the first half of 2022, IA attributed the decline to isolated transactions related to the retirement scheme business. The segment’s total claims and benefits totaled HK$155.4 billion.
New office premiums excluding pension schemes increased by 25.9% to HK$103.0 billion, with non-linked annuity increasing by 32.0% and linked annuity decreasing by 22.0%. In addition, approximately 20,200 qualifying deferred annuity policies attracted HK$1.3 billion in premiums.
The sector recorded HK$31.9 billion in new business premiums from mainland Chinese visitors (MCVs), which accounted for 31% of the total for individual businesses. The recovery was also responsible for 89% of all issued policies, while 27% of premiums were derived from financing arrangements granted by Hong Kong banking institutions.
Growth in the general business
Gross and net premiums for the general insurance business increased by 5.1% and 3.4%, to HK$37 billion and HK$23.3 billion, respectively. Nonetheless, the sector’s claims increased to HK$15,2 billion, an increase of 11.3%. Additionally, the underwriting profit fell from HK$2.5 billion to HK$1.5 billion.
Gross and net premiums for direct businesses increased by 3.1% to HK$26.9 billion and 3.6% to HK$18.6 billion, respectively. Accident and health (A&H) aggregate premiums increased by 13% to HK$10.4 billion due to new coverages and higher rates for the medical subclass, as well as growth in the non-medical subclass’ travel insurance business.
Additionally, the motor vehicle and property damage sectors reported increases of HK$2.6 billion and HK$3.3 billion, respectively. In 2022, a marine insurer will reclassify direct business as reinsurance inward business, resulting in a 16.4% decline in the value of direct business for ships, to HK$1.5 billion.
The direct business generated a total underwriting profit of HK$698 million, a 60.6% decrease, while the net claims incurred ratio increased from 55.1% to 60.0%. The IA attributed this to the unfavorable performance of the A&H line and the decrease in underwriting profit from general liability, which included workers’ compensation.
Gross and net premiums for reinsurance inward business increased by 10.8% and 2.6%, reaching HK$10 billion and HK$4.6 billion, respectively. Strong property damage business and the previously mentioned direct ship reclassification contributed to the increases. Nevertheless, similar to the direct business, the line’s underwriting profit decreased by 2.5% to HK$755 million.