The Insurance Authority (IA) today (28 September 2018) released Hong Kong insurance business statistics for 2017 with reference to the audited returns and actuarial information submitted by insurers. The total gross premiums reached $489.2 billion in 2017, indicating a year-on-year increase of 8.3%.

(Percentage changes in brackets in the following paragraphs represent changes over 2016)

Long term business

Total office premiums for in-force long term business were $440.9 billion in 2017 (increased by 8.5%). The Individual Life category remained the dominant line of business, making up $415.1 billion or 94.1% of total long term business. The respective number of policies in 2017 stood at 12.5 million, carrying net liabilities of $1,849.9 billion.

Yearly contributions for Retirement Scheme contracts administered by insurers were $8.9 billion (increased by 4.2%). There were 62,271 Retirement Scheme contracts carrying net liabilities of $125.2 billion. In-force office premiums for Group Life business were $3.4 billion (increased by 3.9%), carrying net liabilities of $1 billion. In-force office premiums for Annuity business and Other business (mainly Permanent Health business) were $13.6 billion (increased by 39%).

Office premiums for new Individual Life business were $150.6 billion (decreased by 15.9%), including $137.9 billion from Individual Life (Non-Linked) business (decreased by 20.5%) and $12.7 billion from Linked business (increased by 123.2%). The total number of new policies was 1.3 million in 2017 (minimal change).

General business

In 2017, the total gross premium and net premium of general business stood at $48.3 billion (increased by 6%) and $33.1 billion (increased by 5%). The overall retention slightly decreased from 69.2% to 68.5%.

The gross premium growth was mainly driven by growth in Accident & Health business followed by Motor Vehicle business, of which the amount were $15.7 billion (increased by 12.2%) and $5.9 billion (increased by 7.7%) respectively in 2017.

The overall underwriting performance of general insurance business turned from a profit of $1.8 billion in 2016 to a loss of $800 million in 2017. The overall net claims incurred ratio increased from 58.6% in 2016 to 63.8% in 2017.

The deteriorated claims situation of general insurance business in 2017 was mainly due to the unfavorable claims experience in Property Damage reinsurance inward business resulting from Typhoon Hato. As such, the underwriting performance of the overall Property Damage business turned from a profit of $900 million in 2016 to a loss of $1.2 billion in 2017, which was the first time in the past five years and became the largest contributor to the overall underwriting loss in 2017. On the other hand, both Accident & Health business and Pecuniary Loss business recorded strong growth in underwriting profit to $321 million (increased by 19%) and to $320 million (increased by 41%) respectively.

With regard to the two major classes of compulsory insurance business, the underwriting losses of both the direct Motor Vehicle business and the Employees’ Compensation business widened from $199 million to $521 million, and from $431 million to $584 million respectively.

A summary of the Hong Kong insurance statistics for 2017 is in the annex. Detailed statistics of industry aggregates and individual insurers are available at the IA website (www.ia.org.hk).