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.
Cross-border movement between the state and Mainland China led to a recovery for the sector, with new business premiums derived from visitors posting $9.6 billion, up 2686.4% and representing a fifth of the total for individual businesses. For context, in the same period last year, new business premiums derived from Mainland visitors accounted only for 26.4%, worth $12.8 billion.
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.
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.
“With promotion campaigns to attract tourists underway, this has firmly placed Hong Kong back into the international spotlight for tourism and business activities. The demand for life policies from offshore customers has already surpassed pre-pandemic levels and we anticipate this growth momentum to continue in the second quarter. We look forward to welcoming more of our international customers back to the city and serving as their number-one life partner,” Moncreiffe said.
Meanwhile, another top insurer, Manulife, commented on the robust surge of insurance demand from both domestic customers and Mainland Chinese visitors. CEO Patrick Graham said that the movement has accelerated the firm’s business momentum, resulting in a remarkable annualized premium equivalent (APE) sales growth of 26% compared to the same period last year.
“Sales for critical illness plans and qualifying deferred annuity plans have both experienced exceptional growth, with each recording year-on-year increases of over 40%. APE sales to MCV reached a record quarterly high, exceeding pre-pandemic levels. In addition, we have successfully maintained our No.1 position in investment-linked product sales for the first quarter,” Graham said.
Anticipating a growing interest in health and protection products for both domestic and overseas visitors, Graham also announced the opening of a second prestige centre in Tsim Sha Tsui, as well as adding more agents and brokerage channels and expanding the firm’s medical partner networks across Hong Kong, Macau, and Mainland China.
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