The Hong Kong insurance industry reported a total gross premiums growth of 4.9% y-o-y to HK$608.4 billion (US$78.37 billion) for 2020, according to provisional statistics released by the Insurance Authority (IA).
Long Term Business
Total revenue premiums of in-force long term business were $548.1 billion in 2020 (increased by 4.5%), mainly comprising:
- $463.9 billion from Individual Life and Annuity (Non-Linked) business (increased by 1.5%),
- $27.7 billion from Individual Life and Annuity (Linked) business (increased by 0.1%), as well as
- $50.7 billion from Retirement Scheme business (increased by 50.3%).
On the other hand, new office premiums (excluding Retirement Scheme business) of long term business were $133.4 billion (decreased by 22.8%), made up of $120.2 billion from Individual Life and Annuity (Non-Linked) business (decreased by 25%) and $12.8 billion from Linked business (increased by 8.8%).
In 2020, some 64,000 Qualifying Deferred Annuity Policies were issued that attracted an inflow of $4.5 billion in terms of new office premiums, representing 3.4% of the total for individual businesses.
Continued restrictions on cross-boundary passenger traffic caused new office premiums attributable to Mainland visitors to contract from $43.4 billion in 2019 to $6.8 billion in 2020 (decreased by 84.3%), representing 5.1% of the total for individual businesses.
About 98% of 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 8% of the policies respectively.
In 2020, the gross and net premiums of general insurance business were $60.3 billion (increased by 8.3%) and $40.9 billion (increased by 8.7%), respectively. The overall underwriting profit improved further from $1.1 billion to $2.2 billion, fuelled by direct business.
The gross and net premiums of direct business were $44.4 billion (increased by 4.7%) and $31.3 billion (increased by 6.2%), respectively.
Accident & Health business slipped by 5.8%, within which the Medical subclass registered modest gain of 2.4%, and the Non-medical subclass saw a dip of 43.3% as outbound travel remained hampered.
Gross premiums of Pecuniary Loss business continued to surge by 88.4% due to upward adjustment of maximum property values under the Mortgage Insurance Programme.
General Liability (comprising Employees’ Compensation) business maintained a steady growth of 7.9%, while
Motor Vehicle business also went up by 4%.
Direct business generated an underwriting profit of $1.7 billion (increased by 95.5%). Accident & Health business contributed $973 million (increased by 218.4%), while Employees’ Compensation business turned around from losing $169 million to a profit of $391 million, even though the favourable performance is heavily influenced by suppression of claims amidst COVID-19.
Nonetheless, the narrowing of underwriting loss for Motor Vehicle business from $404 million to $241 million is a welcome development.
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