What happened in the Hong Kong insurance industry in 2023?
What happened in the Hong Kong insurance industry in 2023? | Insurance Business Asia
Insurance News
What happened in the Hong Kong insurance industry in 2023?
New report covers long-term and general lines of business
Insurance News
By
Roxanne Libatique
Hong Kong’s Insurance Authority (IA) has released preliminary data for the territory’s insurance market in 2023, revealing a modest contraction in total gross premiums to HK$549.7 billion, marking a 1.1% reduction from the previous year’s figures.
The detailed breakdown for the year indicates a shift in the dynamics of the long-term insurance business.
Long-term business statistics
The industry reported revenue premiums totalling HK$482.4 billion in 2023, showing a 1.8% decrease.
A closer look revealed that individual life and annuity (non-linked) business experienced a growth of 2.6%, reaching HK$423.4 billion. Conversely, individual life and annuity (linked) and retirement scheme business faced downturns, dropping by 16.8% and 34.3% to HK$23.6 billion and HK$29.3 billion, respectively. These changes primarily stem from specific retirement scheme transactions conducted in 2022.
Additionally, policyholders saw an 11.6% increase in claims and benefits payouts, totalling HK$332.4 billion.
For new office premiums in the long-term sector, excluding retirement scheme activities, there was a robust increase of 34.2%, culminating in HK$181 billion. This was largely fuelled by a notable 41.8% increase in individual life and annuity (non-linked) business, which amounted to HK$169.4 billion. However, the linked segment saw a decline of 25.1%, bringing in HK$11.2 billion.
The market also welcomed approximately 30,000 new qualifying deferred annuity policies, contributing HK$1.9 billion in premiums, or 1.1% of the individual business segment’s total.
The influx of Mainland visitors, a significant revenue source for individual business premiums, observed a marked decrease in the latter half of 2023, with a 32.9% fall in the third quarter, followed by an 18.9% drop in the fourth quarter, totalling HK$12.1 billion.
Overall, this customer segment contributed HK$59 billion for the year, which equates to 32.6% of the individual business segment’s revenue, predominantly through policies involving regular payment structures.
General business statistics
In the general insurance segment, there was a positive movement with total gross and net premiums increasing to HK$67.3 billion and HK$43.3 billion, respectively. However, the sector faced challenges as gross claims rose by 6.8% to HK$32.1 billion, and underwriting profits significantly decreased.
Direct insurance business saw an uptick in premiums driven by a surge in accident and health coverage, likely due to increased travel and group medical insurance demand. Yet, certain segments like pecuniary loss suffered, primarily due to the underperforming property market, significantly impacting overall profitability.
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