Hong Kong insurance industry grows 6.6%

Hong Kong insurance industry grows 6.6%

Hong Kong insurance industry grows 6.6% The Office of the Commissioner of Insurance (OCI) has reported a 6.6 per cent increase in the total gross premiums of the Hong Kong insurance industry for the first quarter of 2016, according to the provisional statistics released.

According to the report, the total amount of revenue premiums of long-term in-force business recorded a growth of 7.5 per cent from the 1st quarter of 2015 to $88.0 billion over the same period of 2016. Revenue premiums of Individual Life and Annuity (Non-Linked) business increased by 15.9 per cent to $73.8 billion; while Individual Life and Annuity (Linked) business decreased by 38.7 per cent to $7.3 billion. Contributions of Retirement Scheme business grew by 10.7 per cent to $5.4 billion.

New office premiums (excluding Retirement Scheme business) of long-term business for the first quarter of 2016 saw an increase of 5.9 per cent to $38.6 billion from the same period of 2015, OCI reported.

Individual Life and Annuity (Non-Linked) business rose by 16.2 per cent to $37.3 billion; whereas new office premiums of Individual Life and Annuity (Linked) business dropped by 70.8 per cent to $1.2 billion.

OCI said that in terms of policies issued to mainland visitors, new office premiums amounted to $13.2 billion, or 34.2 per cent of the total new office premiums ($38.5 billion) for individual business in the first quarter of 2016.

In the 1st quarter of 2016, gross premiums of general insurance business increased by 1.1 per cent to $13.1 billion; while net premiums declined 2.1 per cent to $8.9 billion compared with the corresponding quarter in 2015. Meanwhile, overall underwriting profit dropped from $645 million to $574 million.

On direct business, gross premiums rose by 3.8 per cent to $10.6 billion; while net premiums dropped by 2 per cent to $7.4 billion in the first quarter of 2016 as compared with the first quarter of 2015. These are mainly driven by Accident & Health business and Ships business − with the former recording a growth in gross premiums from $3.8 billion to $4.2 billion, and the latter recording a growth in gross premiums from $1.2 billion to $1.4 billion.

The underwriting profit of direct business increased from $375 million in the 1st quarter of 2015 to $549 million in the corresponding period in 2016. The underwriting performance of the Ship’s business turned a profit of $97 million, offsetting the decrease in the underwriting profit of Accident & Health business, from $122 million to $55 million, and Pecuniary Loss Business, from $97 million to $36 million.

On the reinsurance inward business, net premium maintained at $1.5 billion while gross premiums decreased from $2.7 billion to $2.4 billion in the 1st quarter of 2016 compared with the corresponding period in 2015. Adverse claims experience resulted to the drop in underwriting profit, from $270 million to $25 million.

For a more detailed report, visit the Office of the Commissioner of Insurance website at www.oci.gov.hk.