Hong Kong’s insurance premiums climb 5.1% YoY in H1 2024

Both long-term and general business recorded YoY growths.

Hong Kong's insurance industry recorded a 5.1% year-on-year (YoY) increase in total gross premiums for the first half of 2024 (H1 2024), reaching $40.42b (HK$310.9b) compared to the same period in 2023, data from the Insurance Authority (HKIA) showed.

In the long-term or life business sector, total revenue premiums from in-force policies amounted to $35.49b (HK$273b), marking a 5.5% YoY climb. 

This growth was largely driven by Individual Life and Annuity (Non-Linked) business, which saw premiums rise by 6.9% YoY to $31.63b (HK$243.3b). 

However, the Individual Life and Annuity (Linked) business dipped by 16% YoY to $1.39b (HK$10.7b), whilst the Retirement Scheme business saw a modest increase of 1.9% YoY to $1.96b (HK$15.1b). 

During this period, claims and benefits paid out to policyholders rose significantly by 18.2% YoY, totalling $23.87b (HK$183.6b).

New office premiums for long-term business, excluding Retirement Scheme business, jumped 12.3% YoY to $15.07b (HK$115.9b). The majority of this came from Individual Life and Annuity (Non-Linked) business, which increased by 15.5% YoY to $14.47b (HK$111.3b). 

In contrast, Individual Life and Annuity (Linked) businesses saw a sharp decline of 34.7% YoY, with premiums totalling $0.56b (HK$4.3b). 

Additionally, around 44,000 Qualifying Deferred Annuity Policies were issued, contributing $0.36b (HK$2.8b) in premiums, representing 2.4% of the total for individual businesses.

The data also indicated a 6.9% YoY contraction in new business premiums from Mainland visitors, totalling $3.86b (HK$29.7b). Their share of total new office premiums for individual businesses fell from 31% to 25.7%. 

Of the new policies issued to Mainland visitors, 97% were settled at regular intervals, with whole life, critical illness, and endowment insurance accounting for 59%, 29%, and 3% of these policies, respectively.

In the general insurance sector, gross and net premiums reached $4.93b (HK$37.9b) and $3.17b (HK$24.4b), respectively, with gross claims amounting to $2.25b (HK$17.3b), a 13.7% YoY jump. The overall underwriting profit improved to $0.25b (HK$1.9b), surging 33.9% YoY.

Direct business contributed $3.61b (HK$27.8b) in gross premiums, a 3.2% YoY rise, whilst net premiums grew by 2.1% to $2.47b (HK$19b). 

The Accident & Health business led this growth with gross premiums rising by 12.5% YoY to $1.52b (HK$11.7b), supported by group medical and travel insurance demand. 

Property Damage and Motor Vehicles businesses also saw increases in gross premiums to $0.44b (HK$3.4b) and $0.36b (HK$2.8b), respectively. 

Conversely, Pecuniary Loss (including Mortgage Guarantee) business saw a 35% YoY decline in gross premiums, dropping to $0.17b (HK$1.3b) due to a cautious property market.

The direct business sector achieved an overall underwriting profit of $0.18b (HK$1.4b), nearly doubling (95.4% YoY). The net claims incurred ratio improved slightly to 58.5%. 

General Liability (including Employees’ Compensation) business reported a 92.2% YoY surge in underwriting profit to $0.10b (HK$0.8b), whilst Pecuniary Loss business saw its underwriting profit surge by 128% YoY to $0.06b (HK$0.5b), largely due to reduced upfront commission payments in the Mortgage Guarantee segment.

Reinsurance inward business reported gross and net premiums of $1.31b (HK$10.1b) and $0.70b (HK$5.4b), respectively. 

However, despite growth in Accident & Health and General Liability segments, overall underwriting profit for this sector fell by 23% YoY to $0.08b (HK$0.6b), with the net claims incurred ratio rising to 54.1% YoY due to adverse claims experience.

($1.00 = HK$7.80)