The Insurance Authority (IA) has released provisional statistics of the Hong Kong insurance industry for the first three quarters of 2020, indicating a growth of total gross premiums by 5.5% to $461.1 billion over the corresponding period in 2019.
Long Term Business
Total revenue premiums of in-force long term business were $412.7 billion in the first three quarters of 2020 (increased by 5.1%), mainly comprising $349.3 billion from Individual Life and Annuity (Non-Linked) business (increased by 2.2%), $19.8 billion from Individual Life and Annuity (Linked) business (decreased by 3.4%), as well as $38.2 billion from Retirement Scheme business (increased by 48.5%).
On the other hand, new office premiums (excluding Retirement Scheme business) of long term business were $98.7 billion (decreased by 29.4%), made up of $90.5 billion from Individual Life and Annuity (Non-Linked) business (decreased by 30.8%) and $7.8 billion from Linked business (decreased by 8.2%). In the first three quarters of 2020, some 55,000 Qualifying Deferred Annuity Policies were issued that brought in new office premiums of $3.9 billion, representing 3.9% of the total for individual businesses.
Since cross-boundary passenger movements remain restricted, the new office premiums attributable to Mainland visitors in the third quarter of 2020 contracted by 68.3% to $266 million, leading to a cumulative drop of 81.9% to $6.5 billion in the first three quarters that represents 6.6% of the total for individual businesses. About 98% of the policies taken out by this group of customers were settled at regular intervals (i.e. non-single premiums), with critical illness, whole life and medical insurance accounting for 48%, 36% and 5% of these policies respectively.
The gross and net premiums of general insurance business in the first three quarters of 2020 were $48.5 billion (increased by 9.3%) and $32.8 billion (increased by 8.4%) respectively, while underwriting profit rose from $856 million to $1,435 million, driven again by direct business.
The gross and net premiums of direct business were $35.6 billion (increased by 5%) and $25.1 billion (increased by 4.9%) respectively. Accident & Health business suffered a decline of 3.8% as the Non-medical subclass slumped by 40.2% with no uptick of outbound travel, and the Medical subclass edged up by only 3.6%. Nonetheless, gross premiums of Pecuniary Loss business continued to surge by 83.4% on the back of demands arising from upward adjustment of maximum property values under the Mortgage Insurance Programme.
General Liability business maintained a steady growth of 6.7%, comparing with 14.2% in the same period last year.
Direct business generated an underwriting profit of $1,262 million (increased by 71.5%) due to improved performance resulting from lower reported claims amidst the COVID-19 pandemic. Accident & Health business registered a profit of $866 million, Employees’ Compensation business also recovered from a loss of $71 million to a profit of $308 million.
(Percentage figures shown in brackets represent year-on-year changes)
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