The Hong Kong insurance industry has recorded significant growth in gross premiums in the first half of 2019, and a big increase in general business underwriting profit, according to provisional statistics published by the Insurance Authority. Total gross premiums totalled $295.8bn got the first six months of 2019, an increase of 16.6% over the corresponding period in 2018.
The biggest increase was seen in long-term business, with the total amount of revenue premiums of long-term, in-force business increasing by 17.5% to $265.3bn in the first half of 2019. For general business, gross and net premiums recorded in the first half of 2019 were $30.5bn (up 9.4%) and $21bn (up 8.5%) respectively. Overall underwriting performance of general business recorded a profit of $432m, an increase of 41.2%.
On direct business, gross and net premiums reached $23.3bn (up 11%) and $16.3bn (up 10.2%) respectively. The Insurance Authority said premium growth was noted in multiple business lines. Accident and health business (comprising medical business) continued to be one of the major contributors of premium growth, with gross premiums reaching $9.7bn, an increase of 9.5% in the first half of 2019.
Gross premiums of general liability business increased to $5.7 billion (up 15.6%), mainly contributed by employees compensation business. Ships business also showed strong growth, driven by several newly authorised insurers, with gross premiums increasing by 23.6% to $1.7bn.
Direct business generated an underwriting profit of $558m, an increase of 62%. According to the Insurance Authority, this was mainly due to the lower underwriting loss for ships business, which reduced from $144m to $41m as a result of improved claims experience. It added that favourable claims experience was also observed for pecuniary loss business, which saw underwriting profit increase by 48.2% to $198m. Motor vehicle business reported an underwriting loss of to $109m for the first half of 2019, an improvement on the loss of $164m for the first half of 2018.
On reinsurance inward business, gross and net premiums stood at $7.2bn (up 4.6%) and $4.6bn (up 2.9%) respectively. The underwriting performance, however, deteriorated from a loss of HK$38m to a loss of HK$126m. The Insurance Authority said that while the majority of business lines showed a worsening of underwriting results, property damage business maintained its profitability, with an increase of 137.9% in underwriting profit to HK$326m due to improved claims experience.