The Hong Kong Insurance Authority has released provisional statistics of the territory’s insurance industry in the first half of 2021, showing that total gross premiums declined by 2.2% to $307bn, compared to the first half of 2020. The authority said this was largely due to the premium payment pattern embedded in some short-term endowment products.
For general business, gross premiums were down by 0.3% to $33.4bn in the first half of 2021, with net premiums down by 3% to $22.1bn. The overall underwriting profit improved from $624m to $794m.
On direct business, gross premiums increased by 2.1% to $25.1bn, while net premiums increased by 4.3% to $17.7bn. The biggest growth was seen in pecuniary loss business, which saw a 39.1% increase in premiums, based on the upward adjustment of maximum property values under the mortgage insurance programme, the authority noted.
Gross premiums of general liability (others) business went up by 15.9% and property damage business also saw gross premiums increase (by 5.9%) in the first half of 2021. However, accident and health business premiums fell 6.4% largely due to a 33.1% decline in the non-medical subclass caused by limitations on outbound travel. Employees’ compensation business premiums fell by 5.5% due to subdued economic activities amid Covid-19, said the authority.
Direct business generated an overall underwriting profit of $757m in the first half of 2021, similar to the previous year. Underwriting profit of property damage business grew by 58.1% to $292m, while pecuniary loss (others) business saw a huge increase of 571% to $121m. Accident and health business recorded an underwriting profit of $291m, a decline of 40.7%, indicating the resurgence of claims suppressed or deferred by Covid-19, according to the authority.
On reinsurance inward business, gross premiums were $8.3bn (a decline of 7%), while net premiums were $4.4bn (down by 24.4%) for the first half of 2021. The fall in premiums was largely due to motor vehicle business, but partially offset by better results coming out of accident and health business, and property damage business. The authority said the overall underwriting performance recovered from a loss of $13m to a profit of $37m in the first half of 2021 despite the impact of claims on property damage business, whose underwriting performance deteriorated from a profit of $128m to a loss of $198m in the first half of 2021.