According to provisional statistics released by the Insurance Authority (IA), the Hong Kong insurance industry experienced a 7% decrease in total gross premiums during the first quarter of 2023 compared to the same period in 2022, amounting to $147.2 billion.
In the long-term business sector, total revenue premiums for in-force policies reached $126.6 billion, reflecting a decrease of 8.9%. This decline was primarily driven by a decrease in the Individual Life and Annuity (Non-Linked) business, which accounted for $109.7 billion (a decrease of 3.2%).
Individual Life and Annuity (Linked) business also saw a significant drop of 18%, contributing $6.5 billion to the total.
Furthermore, the Retirement Scheme business experienced a substantial decline of 47.6%, generating $8.3 billion in premiums. However, there was an increase of 9.6% in total claims and benefits paid to policyholders, amounting to $78.5 billion.
In terms of new office premiums for long-term business (excluding Retirement Scheme business), there was an increase of 10.7%, reaching $47 billion. This growth was mainly attributed to the Individual Life and Annuity (Non-Linked) business, which saw a 15.2% increase and accounted for $43.5 billion.
However, the Linked business faced a decline of 25.2%, contributing $3.4 billion. Notably, the issuance of 16,600 Qualifying Deferred Annuity Policies attracted $1 billion in premiums, representing 2.2% of the total for individual businesses.
The first quarter of 2023 witnessed a remarkable recovery in new business premiums from Mainland visitors, reaching $9.6 billion. This surge can be attributed to the resumption of cross-boundary passenger movement and a low base of comparison from the previous year, reflecting an increase of 2686.4%.
These premiums accounted for 20.5% of the total for individual businesses, although still lower than the figures from the first quarter of 2019.
Moving to the general business sector, gross premiums for general insurance reached $20.7 billion, indicating a 6.9% increase, while net premiums increased by 4.1% to $12.5 billion. Gross claims paid during this period amounted to $7.5 billion, experiencing a decrease of 4.7%. However, the overall underwriting profit decreased from $1,063 million to $513 million.
Within the direct business segment, gross premiums for Accident & Health business saw a significant increase of 12.4%, reaching $6.1 billion. Motor Vehicles business and Property Damage business also experienced growth, with gross premiums amounting to $1.3 billion (an increase of 13.1%) and $1.6 billion (an increase of 4.5%), respectively.
On the other hand, the gross premiums of Pecuniary Loss (including Mortgage Guarantee) business decreased by 9.3% to $860 million, while the gross premiums of Ships business declined by 10.3% to $1.5 billion due to a reclassification of direct business to reinsurance inward business by a marine insurer.
The direct business generated an overall underwriting profit of $387 million, representing a decrease of 59.9%. This decline was influenced by adverse outcomes in Accident & Health business, Motor Vehicle business, Ships business, and General Liability (including Employees’ Compensation) business, leading to a rise in the net claims incurred ratio from 54.5% to 60.5%.