Hong Kong insurance industry suffers setback in the first half

Hong Kong insurance industry suffers setback in the first half

The total amount of claims and benefits payouts made to policyholders decreased by 1.4% to HK$148.8 billion. During the same period, new office premiums (excluding retirement scheme business) increased by 1.7% to HK$81.9 billion.

Following a plunge due to COVID-19 restrictions, income from Mainland Chinese visitors showed recovery, increasing 150% to HK$540 million. This represented 0.7% of the total for individual businesses. Critical illness, whole life and medical insurance accounted for 32%, 32% and 26% of the policies, respectively.

Compared to the long-term segment, Hong Kong’s general insurance segment fared a bit better, with gross premiums at HK$35.2 billion (up 5.5%) and net premiums at HK$22.5 billion (up 1.7%). Total gross claims payment was at HK$13.7 billion, an 8.1% decrease, while overall underwriting profit surged 220.5% to HK$2.545 billion from HK$794 million in the first half of 2021.

The general liability (including employees’ compensation) business grew 10.3%, while accident & health and property grew by 3.5% and 6.2%, respectively. This was attributed by the IA to hardening of rates and new business, which were partially offset by the pecuniary loss business, where gross premiums declined by 4.1% due to decreased loan drawdowns under the Mortgage Insurance Programme.

Direct business’ underwriting profit grew 134% to HK$1.77 billion, with the net claims incurred ratio dropping from 59.8% to 55.1% due to the positive experience recorded by the general liability, marine and pecuniary loss businesses. Meanwhile, the underwriting profit of accident and health business dropped from HK$291 million to HK$191 million due to claims reserves for medical insurance returning to pre-pandemic levels.

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