The Hong Kong general insurance industry is projected to be worth HK$78.6 billion (US$10.1 billion or SG$13.66 billion) in 2026, growing from HK$57.2 billion in 2021, with a compound annual growth rate (CAGR) of 6.6%, according to a study by GlobalData.
The growth will be driven by rising demand for liability insurance, as well as strong performance in property insurance caused by expansion in real estate and construction activities in the city.
“After recovering by 6.1% in 2021, the Hong Kong GDP growth is expected to slow down to 1.5% in 2022 due to the resurgence in the number of COVID-19 cases,” said Jeneshree Sahoo, insurance analyst at GlobalData. “Despite these challenges, the general insurance industry is forecasted to grow by 5.7% in 2022, driven by a strong performance from liability, property, and financial lines insurance.”
Personal accident and health (PA&H) is the largest general insurance line in Hong Kong with a GWP share of 30.8% or HK$16.9 billion in 2020, when it suffered a 4.8% decline due to pandemic-led lockdown and outbound travel restrictions. If restrictions ease, the PA&H line is expected to recover from 2022 and grow at a CAGR of 5.1% during 2021–2026 to reach HK$21.4 billion in 2026.
Liability insurance is the second-largest line with a GWP share of 23.9% in 2020. Due to rising demand for cyber insurance policies amid the shift remote working, the market grew by 8.8% in 2020. The rise in financial fraud incidents in the past few years has spurred demand for D&O insurance.
Property insurance, the third-largest general insurance line with a share of 18.7%, grew by 13.2% in 2020, driven by increased real estate and construction activities.
Financial lines insurance, which had an 8.3% GWP share in 2020, is the fastest-growing segment. It grew by 60.7% in 2020 as premiums rose following the upward adjustment of property values defined under the Mortgage Insurance Program. The remaining 18.3% share consists of motor and marine, aviation and transit insurance.
“Hong Kong’s low insurance penetration … at 1.6% provides ample opportunities for general insurance growth,” Sahoo said. “A gradual economic recovery, increasing cyber risks and growing commercial real estate activities are expected to support growth of general insurance over the next five years.”
