HK insurance gross premiums down 7% in Q1

HK insurance gross premiums down 7% in Q1 | Insurance Business Asia

Insurance News

HK insurance gross premiums down 7% in Q1

HSBC Life, Manulife react to the statistics

Insurance News

By
Kenneth Araullo

The Hong Kong insurance sector has posted a 7% decrease in total gross premiums for the first quarter of the fiscal year, posting $147.2 billion.

According to the Hong Kong Insurance Authority (IA), total revenue premiums of in-force long-term business went down to $126.6 billion, equivalent to a deficit of 8.9%. The Retirement Scheme business was almost slashed in half (down 47.6%) for $8.3 billion worth in the period. IA attributed this to the isolated transactions concerning the business for the same period in 2022 and premium payment pattern of some products related to individual life and non-linked annuity business. The non-linked annuity business also posted an 18% decrease to post $6.5 billion.

Total claims and benefits also increased to $78.5 billion, 9.6% higher than what was paid out in the same quarter of the last fiscal year. There was also an increase for new office premiums of long-term business, posting a 10.7% rise worth $47 billion.

Some good figures for the general business

Outside the life sector, the general insurance business posted some decent gains in Q1. The gross and net premiums for the sector were $20.7 billion (6.9% increase) and $12.5 billion (4.1% increase), respectively. The total gross claims recorded was $7.5 billion, a decrease of 4.7%. Overall underwriting profit went down from $1.063 billion to $513 million.

Direct business gross and net premiums posted $14.9 billion (a 4.8% increase) and $10.1 billion (a 4.4% increase), respectively. Gross premiums for the accident and health business increased by 12.4% thanks to new business written and rate hardening for the medical subclass and uptick of outbound travel for the non-medical subclass.

Meanwhile, the motor vehicle and property damage sides also posted upticks, with gross premiums of $1.3 billion (up 13.1%) and $1.6 billion (up 4.5%), respectively. These gains were somewhat offset by a sluggish performance from the pecuniary loss sector, which comprises mortgage guarantee; the latter decreased by 9.3% to post $860 million. Likewise, ships also declined with gross premiums worth $1.5 billion, a fall of 10.3%. IA attributed this to actions taken by a marine insurer to reclassify direct business to reinsurance inward business.

Underwriting profit from direct business generated a $387 million revenue, which is 59.9% lower than the last quarter. Adverse outcomes in the accident and health business, motor vehicle business, ships business, and general liability resulted in the net claims incurred ratio going up from 54.5% to 60.5% upon normalization of economic activities.

Reinsurance improved overall, with gross and net premiums recording $5.7 billion (up 12.7%) and $2.4 billion (up 3%), respectively. This movement was driven by the reclassification of the direct ships business and new coverages written for property damage business. Overall underwriting profit for the sector also improved, from $98 million to $127 million.

HSBC Life, Manulife react

Provisional statistics from the IA also revealed that HSBC Life claimed the top spot in new business premiums for the first quarter of 2023, equivalent to a market share of 21.7%.

HSBC Life Hong Kong CEO Edward Moncreiffe said that the firm wrote over HK$10 billion in new business premiums during the quarter, a testament to the insurer’s commitment in meeting the health and wealth needs of its customers across the GBA.