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The Office of the Commissioner of Insurance (OCI) today (December 6) released provisional statistics of the Hong Kong insurance industry for the first three quarters of 2007.
In the first three quarters of 2007, gross and net premiums for general insurance business recorded a modest growth of 4.3% to HK$18,809 million and 4.8% to HK$13,477 million respectively as compared with the corresponding period in 2006. However, the overall underwriting result went down from HK$2,034 million to HK$1,783 million on account of deteriorating claims experience and higher management expenses.
On direct business, gross premiums and net premiums increased by 4.7% to HK$15,074 million and 5.2% to HK$10,960 million respectively in the first three quarters of 2007, primarily driven by medical business whose gross premiums surged by 20.2% to HK$3,642 million and net premiums by 19.2% to HK$3,308 million. Despite a rising number of insured vehicles, the performance of the motor vehicle business continued to deteriorate as gross premiums fell by 3.9% to HK$1,880 million. On the other hand, ships business benefited from a wider scope of vessels covered by the Merchant Shipping (Local Vessels) Ordinance with effect from July 2, 2007, and recorded a rise in gross premiums by HK$11 million to HK$32 million.
Underwriting profit of direct business shrank from HK$1,207 million to HK$893 million in the first three quarters of 2007, largely attributable to unfavourable outturn of the motor vehicle business, ships business and employees' compensation business. Soft market conditions resulted in a considerable dip of underwriting profit from HK$196 million to HK$13 million for the motor vehicle business as well as a reversal from a profit of $21 million to a loss of HK$87 million for the employees¡¯compensation business. Adverse claims experience was the primary cause for an underwriting loss of HK$91 million for the ships business compared with a profit of HK$21 million for the corresponding period in 2006.
On reinsurance inward business, gross and net premiums grew by 2.9% to HK$3,736 million and 3.4% to HK$2,517 million respectively in the first three quarters of 2007, while underwriting profit improved slightly from HK$827 million to HK$890 million, mainly due to the release of claims reserve.
Total revenue premiums of long term in-force business amounted to HK$122,989 million in the first three quarters of 2007, representing an increase of 26% over the same period in 2006.
Revenue premiums of individual life and annuity (non-linked) business and individual life and annuity (linked) business grew by 8.2% to HK$54,309 million and 59.4% to HK$49,963 million respectively. Contributions of the retirement scheme business also recorded growth by 17.5% to HK$16,558 million. On the benefit side, total insurance benefits paid to individuals increased by 30.8% to HK$41,898 million.
Statistics for the first three quarters of 2007 showed that new office premiums (excluding retirement scheme business) of long term business increased by 41.7% to HK$54,408 million compared with the same period in 2006. Although individual life and annuity (non-linked) business decreased by 4.7% to HK$14,317 million in terms of new office premiums, individual life and annuity (linked) business leaped by 72.0% to HK$39,756 million.
In respect of new policies issued to Mainland visitors, office premiums amounted to HK$3,455 million, representing 6.4% of the total new office premiums (HK$54,273 million) for individual business in the first three quarters of 2007.
Summary of provisional statistics of the Hong Kong insurance business from January to September 2007 is attached in the annex. Further details can be downloaded from the OCI's website: www.oci.gov.hk.
Ends/Thursday, December 6, 2007
Issued at HKT 15:07
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