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The Office of the Commissioner of Insurance (OCI) today (September 30) released the Hong Kong insurance business statistics for 2008 based on audited returns and actuarial information submitted by insurers.
In 2008, total gross premiums of the Hong Kong insurance industry decreased by 4.4% to HK$188.7 billion, representing about 11.3% of Hong Kong's Gross Domestic Product, sliding from 12.2% in 2007.
General insurance business recorded an increase of gross and net premiums by 10.1% to $26.7 billion and 10.4% to $18.8 billion in 2008 respectively when compared with 2007, with the overall retention ratio edging up slightly from 70.3% to 70.5%.
The rise in gross premiums was primarily boosted by Accident and Health business (comprising Medical business) whose gross premiums surged by 15.8% to $7.2 billion, representing about 27.0% of total general business. Pecuniary Loss business (comprising Mortgage Guarantee business) also displayed strong momentum with a 33.3% growth in gross premiums to reach $2 billion. For other major classes of business, General Liability business (comprising Employees' Compensation business), Property Damage business and Motor Vehicle business all recorded a modest growth in gross premiums of 5.9% to $6.1 billion, 6.9% to $5.7 billion and 7.0% to $2.8 billion respectively.
The overall underwriting performance of general insurance business, however, deteriorated with the profit contracting significantly from $2.4 billion in 2007 to $1.3 billion in 2008, mainly attributable to adverse claims experience recorded. Net claims incurred ratio was 57.1% for 2008 compared with 49.6% for the previous year.
Accident and Health business became the largest contributor to the overall underwriting profit, rising from $324 million to $515 million in 2008. This was followed by Property Damage business with its underwriting profit dropping to $483 million from $783 million. The underwriting result of Pecuniary Loss business also deteriorated with the profit declining from $353 million to $138 million. As for the two major classes of compulsory insurance business, Motor Vehicle business reversed from a profit of $11 million to a loss of $292 million whilst the loss incurred by Employees' Compensation business widened from $164 million to $489 million.
For long term insurance business, office premiums of new Individual Life business lost 25.9% to $59.4 billion in 2008, mainly caused by a drop of Individual Life (Linked) business by 40.8% to $35.7 billion. New office premiums for Individual Life (Non-Linked) business increased by 19.0% to $23.8 billion. The total number of new policies decreased by 8.3% to 1,008,338 in 2008.
In respect of in-force long term business, total office premiums dropped 6.4% from $173.0 billion in 2007 to $161.9 billion in 2008. Individual Life remained the dominant line of business, making up $142.3 billion or 87.9% of the total; the corresponding number of polices stood at 8.2 million, carrying net liabilities of $498.4 billion.
Yearly contributions for Retirement Scheme contracts administered by insurers decreased 2.4% to $15.8 billion. At the end of 2008, there were 75,147 Retirement Scheme contracts carrying net liabilities of $124.9 billion.
In-force office premiums of Group Life business rose by 1.7% to $1.4 billion, whereas the number of policies decreased by 0.4% to 16,361 and net liabilities increased by 4.0% to $584 million respectively.
In-force office premiums of Annuity and other businesses (comprising mainly Permanent Health business) grew by 2.0% to reach $2.4 billion, accounting for 1.5% of the total in respect of long term insurance business.
The detailed statistics, including industry aggregates and those of individual insurers, are available from the website of the OCI at (www.oci.gov.hk).
Ends/Wednesday, September 30, 2009
Issued at HKT 15:01
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