The Insurance Authority (IA) of Hong Kong released its interim numbers for the first half of 2023, revealing a decrease of total gross premiums by 1.4% to HK$295.7 billion.
The in-force long term business’ total revenue premiums reached HK$258.7 billion, a decrease of 2.2%, and comprises the following lines:
IA attributed the decline to isolated transactions related to the retirement scheme business during the first half of 2022. In total, the segment’s claims and benefits amounted to HK$155.4 billion.
New office premiums excluding retirement schemes were up 25.9% to HK$103.1 billion, with non-linked annuity increasing by 32% and linked annuity decreasing by 22.6%. The sector also recorded around 20,200 qualifying deferred annuity policies, attracting HK$1.3 billion in terms of premiums.
Continuing the strong mainland Chinese visitor (MCV) trend, the sector recorded HK$31.9 billion in new business premiums from MCVs, accounting for 31% of the total for individual businesses. The rebound was also responsible for 89% of all policies issued, while 27% of the premiums were sourced from financing arrangements granted by Hong Kong banking institutions.
The gross and net premiums of the general insurance business were HK$37 billion (5.1% increase) and HK23.3 billion (3.4% increase), respectively. However, the sector also saw higher claims figures at HK$15.2 billion, an increase of 11.3%. Overall underwriting profit also plunged from HK$2.5 billion to HK$1.5 billion.
Direct business’ gross and net premiums rose by 3.1% to HK$26.9 billion and 3.6% to HK$18.6 billion, respectively. Accident and health (A&H) gross premiums posted HK$10.4 billion, a 13% uptick, stemming from new coverages and higher rates for medical subclass, in addition to growth in the travel insurance business for the non-medical subclass.
Motor vehicle and property damage lines also saw upticks, reporting HK$2.6 billion and HK$3.3 billion, respectively. Ships, on the other hand, recorded a steep 16.4% decline to HK$1.5 billion because of action to reclassify direct business to reinsurance inward business by a marine insurer in 2022.
In total, the direct business also generated HK$698 million in underwriting profit, a 60.6% fall, with net claims incurred ratio rising from 55.1% to 60.8%. The IA attributed this to undesirable outturn of the A&H line and lower underwriting profit from general liability, including employees’ comp.
As for reinsurance inward business, the gross and net premiums saw increases of 10.8% and 2.6% to post HK$10 billion and HK$4.6 billion, respectively. The upticks came from strong property damage business and the previously mentioned direct ships reclassification. However, like the direct business, the line also suffered in the underwriting profit as it saw a dip of 2.5% to post HK$755 million.
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