Hong Kong insurance industry remained stagnant in 2021

The Hong Kong insurance industry’s total gross premiums for 2021 remained flat at HK$581.7 billion, growing just by 0.06%, according to statistics released by the Insurance Authority (IA).

For long-term business, total in-force premiums were HK$520.1 billion, down 0.3% from 2020. Individual life insurance continued to be the dominant line of business, making up HK$464.6 billion (up 1.3% from 2020) or 89.3% of market share, involving 13.9 million policies that provided coverage for net liabilities of HK$2.83 trillion. In-force office premiums for annuity business were reported at HK$41.7 billion, a 12.9% decrease from the previous year. As of Dec. 31, 2021, there were 207,000 valid qualifying deferred annuity policies.

The general insurance segment saw mild growth, with total gross and net premiums at HK$61.6 billion (up 2.9%) and HK$41.5 billion (up 2.4%) respectively. Overall underwriting profit decreased from HK$2.3 billion to HK$1.7 billion.

Gross premiums of pecuniary loss business grew by 24.9% to HK$5.9 billion. The IA attributed this to the adjustment of maximum property values under the Mortgage Insurance Programme, while gross premiums of property damage business also grew by 8.1% to HK$13.1 billion. However, inward motor vehicle reinsurance business contracted by HK$900 million, reducing the overall gross premiums of motor vehicle business by 11.4% to HK$5.5 billion.

The underwriting profit of direct business in 2021 dipped from HK$1.9 billion to HK$1.1 billion, with the net claims incurred ratio of accident and health insurance rose from 64.8% to 76.4% upon gradual normalisation of settlement activities. Employees’ compensation insurance saw strong growth, with a profit of HK$501 million (up 22.5% from 2020). Motor insurance suffered a widening underwriting loss, from HK$242 million to HK$301 million.

Hong Kong’s reinsurance inward business saw underwriting profit grow from HK$480 million in 2020 to HK$663 million in 2021, driven by proportional treaty business which turned around from a loss of HK$202 million to a profit of HK$6 million.