The overall underwriting performance of the general insurance business sector in Hong Kong increased significantly by 883.9% to $856m for the first three quarters of the year (January-September 2019) according to provisional statistics released by the Insurance Authority. This profit was mainly driven by property damage business. However, recent events are likely to bring about a negative outlook in future.
Overall, the insurance industry reported total gross premiums of $436.9bn, marking an increase of 12.5% over the corresponding period in 2018. There was also a slight jump in gross and net premiums of the general insurance sector in the first three quarters of 2019 which posted $44.4bn (9.5% increase) and $30.3bn (8.1% increase) respectively.
For direct business, gross and net premiums were $33.9bn (11.1% increase) and $23.9bn (10.5% increase) respectively. Accident and health insurance comprising medical insurance continued to be a major contributor to this growth with gross premiums of $14bn (10.1% increase).
The general liability sector also showed good impetus, with gross premiums of $8.5bn (14.2% increase) mainly derived from employees’ compensation business. With a few newly authorised insurers, gross premiums of the ships business went up to $1.9bn (23.4% increase).
The direct business sector also saw a 160.7% jump in underwriting profit to $736m, benefiting from a favourable claims experience in the property damage business, ships business and pecuniary loss business.
At the same time, the property damage business recovered from a loss of $86m in the first three quarters of 2018 as a result of typhoon Mangkhut to a profit of $200m in the corresponding period in 2019.
For reinsurance inward business, gross and net premiums stood at $10.5bn (4.5% increase) and $6.4bn (0.1% increase) respectively. The underwriting performance turned from a loss of $195m to a profit of $120m as result of a strong underwriting performance by the property damage business which improved from a loss of $31m to a profit of $476m.
Performance of long-term business
Compared to the same period last year, growth was also seen in total revenue premiums of long term in-force business (12.9%) and revenue premiums of individual life and annuity (non-linked) business (19.3%).
However, decreases were reported in revenue premiums of individual life and annuity (linked) business (20.5%) and contributions of retirement scheme business (18.5%).
Meanwhile, new office premiums (excluding retirement scheme business) of long term business surged by 15.4% including a 21.8% increase in individual life and annuity (non- linked) business and a major 35.3% decrease in the linked business.