Hong Kong's insurance industry premiums up 14.5%

Net premiums rose 11.8% to $11.7bln while overall underwriting profit stood at $1.3bln.

The total gross premiums of Hong Kong's insurance industry grew 14.5% to $16.6 billion in the first half of this year, the Office of the Commissioner of Insurance says. Net premiums rose 11.8% to $11.7 billion while overall underwriting profit stood at $1.3 billion.

On direct business, gross and net premiums grew 9.4% to $12.8 billion and 8.2% to $9.5 billion, propelled by accident and health business, gross and net premiums of which were $4.4 billion and $3.7 billion, according to a government report.

Employees' compensation business' gross and net premiums were $2 billion and $1.7 billion, and motor vehicle business' gross and net premiums were $1.4 billion and $1.2 billion.

Pecuniary loss business' gross and net premiums were $818 million and $525 million while property damage business' gross and net premiums were $1.8 billion and $1 billion.

Underwriting profit grows
Direct business's underwriting profit rose from $925 million to $962 million. The profit of pecuniary loss business grew from $56 million to $288 million, driven by the strong premium growth in mortgage guarantee business and lower claims for credit business.

Motor vehicle business also showed a material improvement in its underwriting result essentially attributable to premium rates increase as well as better claims experience with the claims incurred figures of an insurer placed in liquidation excluded.

Reduction in profit was however recorded in property damage business as a result of poor claims experience, and the profit fell from $318 million to $132 million.

Adverse claims experience
On reinsurance inward business, gross and net premiums rose from $2.8 billion to $3.8 billion and from $1.7 billion to $2.2 billion. The underwriting profit dropped from $368 million to $311 million due to adverse claims experience.

Total revenue premiums of long-term in-force business was $84 billion, up 12.3% on the same period last year.
Revenue premiums of individual life and annuity (non-linked) business and individual life and annuity (linked) business rose 20.9% to $51.6 billion and 17.4% to $20.4 billion. Contributions of retirement scheme business dropped 18.4% to $10.8 billion. Total insurance benefits paid to individuals rose 26.7% to $35.7 billion.

New office premiums (excluding retirement scheme business) of long-term business rose 46% to $28.5 billion. Both individual life and annuity (non-linked) and individual life and annuity (linked) business recorded significant premium growth, with the former increasing 49.3% to $19.8 billion and the latter growing 41.4% to $8.5 billion.