Hong Kong premiums dips by almost 1% to $76.98 in 2021
General insurance business was up by 1.4%
Hong Kong’s insurance industry saw a dip of 0.9% in gross written premiums to $76.98 in 2021.
Different business segments saw a scattering of decreases and increases throughout the year. Revenue for Individual Life and Annuity (Non-Linked) business slipped by 3.7% to $57.04b in 2021. Individual Life and Annuity (Linked) business soared by 61% to $5.7b. Retirement scheme business saw a decrease of 13.4% to $5.61b for 2021. Total amount of payment made to policyholders in terms of claims and benefits increased by 25.7% to $39.23b, which includes lapse/surrender benefits of $15.23b, and other claims and benefits of $23.99b.
The life or long term business segment also saw new business from Mainland visitors shrinking from
New business derived from Mainland visitors shrank from $870m in 2020 to $87.88m in 2021, a decrease of 89.9%, representing 0.4% of the total for individual businesses. Some 96% of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premium). Critical illness, whole life and medical insurance accounted for 38%, 33% and 19% of the policies respectively.
In the general insurance business, net premiums increased by 1.4% to $5.3b. Total gross claims payments increased by 2.3% to $4.01b. Overall underwriting profit dropped from $285.09m to $250.09m.
In 2021, the gross and net premiums of general insurance business were $61.8 billion (increased by 2.6%) and $41.5 billion (increased by 1.4%) respectively, against which total
Direct business saw its net premiums increased by 3.9% to $4.22b. Pecuniary Loss business sustained a high growth of 33.5% to $590m in gross premiums, fueled by upward adjustment of maximum property values under the Mortgage Insurance Programme. Property Damage business, General Liability (Others) business and Ships business also went up by 5.5%, 9.3% and 10.7% respectively. However, the gross premiums of Accident & Health business fell 2.3%, within which the Medical subclass stayed flat and the Non-medical segments tumbled by 20.8% as outbound travel remained hampered.
Direct business generated an overall underwriting profit of $170.65m, a decreased of 19.1%, as the net claims incurred ratio rose from 58.9% to 61%, which underlies the deteriorated performance of Accident & Health business from a profit of $124.28m to a loss of $7.41m. This was partially offset by positive results achieved by Property Damage business, General Liability business and Pecuniary Loss business with underwriting profits at $73.7m, $125.05m, and $5.24m, respectively.
Meanwhile, reinsurance inward business, net premiums decreased by 12.3%) to $1.07, as the contraction of Motor Vehicle business outweighed an expansion in Property Damage business and Accident & Health business. Nonetheless, the overall underwriting performance rose from $74.34m to $79.45m, mainly contributed by a lowering of the net claims incurred ratio from 62.2% to 59.8%.
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