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The Office of the Commissioner of Insurance (OCI) today (September 28) released the Hong Kong insurance business statistics for 2006 based on audited returns and actuarial information submitted by insurers.
"Driven by robust economic conditions, the total gross premiums (combining general insurance business and long term insurance business) of the Hong Kong insurance industry continued to achieve a double digit growth of 13.7% to reach $156 billion in 2006. It represented about 10.6% of our Gross Domestic Product, compared with 9.9% in 2005," Commissioner of Insurance Mr Clement Cheung said.
Despite this strong out-turn, general insurance business registered only a modest rise in gross premiums of 1.8% to $22.958 billion in 2006. Net premiums grew by 3.6%, attributable to a higher retention ratio of 70.6% compared with 69.4% in 2005.
The rise in gross premiums was largely driven by Accident & Health business that surged 14.8% to $5.364 billion in 2006, making up 23% of the total. General Liability business (comprising Employees¡¦ Compensation (EC) business) and Property Damage business, each constituting more than 20% of the total, reported gross premiums of $5.706 billion and $5.264 billion respectively. Meanwhile, Motor Vehicle business saw a decline of 6.4% in gross premiums to $2,801 million due to keen competition; Pecuniary Loss business also experienced a drop of 18.1% in gross premiums to $1.211 billion, primarily reflecting the volume of mortgage guarantee business.
Acute premium rate cut for EC business seems to have abated, even though competition in Motor Vehicle business has intensified. The gross premiums of EC business in 2006 showed an increase of 4.9% to $2.919 billion, while that of direct Motor Vehicle business dipped by 7.3% to $2.542 billion.
The overall underwriting performance of general insurance business in 2006 contracted from $2.497 billion to $2.067 billion due to deteriorated claims experience as well as higher management expenses. Net claims incurred ratio was 51.0% compared with 48.9% in 2005.
Ships business continued to be the worst performer, whose underwriting loss widened from $156 million in 2005 to $249 million in 2006. On the other hand, Property Damage business remained the largest source of underwriting profit with $772 million in 2006, followed by Pecuniary Loss business and Goods in Transit business with $465 million and $319 million respectively. As for the two major compulsory classes, underwriting loss for EC business diminished from $136 million in 2005 to $85 million in 2006, but underwriting profit of direct Motor Vehicle business suffered a sharp downturn from $384 million in 2005 to $158 million in 2006.
For long-term insurance business, total office premiums in force gained 16.0% from $114.756 billion in 2005 to $133.087 billion in 2006. Individual Life remained the dominant line of business, with office premiums in force of $114.912 billion or 86.3% of the market total, rising 17.0% from 2005. The corresponding number of Individual Life policies stood at 7.1 million, carrying net liabilities of $380.02 billion that grew by 29.7%.
Yearly contributions for Retirement Scheme contracts administered by insurers added 12.0% to $14.635 billion. At the end of 2006, there were 67,860 Retirement Scheme contracts carrying net liabilities of $124.233 billion.
In force office premiums of Group Life business moved up by 8.8% to $1.305 billion, while the corresponding number of policies and net liabilities increased by 2.6% to 15,651 and 13.3% to $597 million respectively.
In force office premiums of Annuity and other businesses (comprising mainly Permanent Health business) moderated by 3.0% to $2.235 billion, accounting only for 1.7% of the total in respect of long term insurance business.
Office premiums of new Individual Life business gained 15.8% to reach $52.510 billion, and the corresponding number of new policies edged up 0.2% from 1,012,488 in 2005 to 1,014,332 in 2006.
The detailed statistics, including industry aggregates and those of individual insurers, are available from the website of OCI at http://www.oci.gov.hk.
Ends/Friday, September 28, 2007
Issued at HKT 15:00
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