Cyber threats to grow Hong Kong’s general insurance industry to $10b in 2026

Strong performance from liability, property, and financial lines insurance to boost the industry.

Rising cases of cyber threats is actually helping the growth of the general insurance industry in Hong Kong which is estimated to reach more than $10b by 2026 report by data and analytics firm GlobalData said.

The general insurance industry is projected to grow at a compound annual growth rate of 6.6% in terms of gross written premiums (GWP).

According to Jeneshree Sahoo, GlobalData insurance analyst, the growth was going to be driven by strong performance in liability insurance as well as property and financial lines insurance.

Currently, personal accident and health insurance is the largest general insurance line in Hong Kong with a GWP share of 30.8% or $2.2b in 2020. It declined by 4.8% during the pandemic however with the expected easing of restrictions, it is projected to grow at CAGR 5.1% in 2021 to 2026 reaching $2.7b.

Meanwhile, liability insurance is the second-largest line with a GWP share of 23.9% in 2020. It grew by 8.8% in the year, driven by the growing demand for cyber insurance policies due to remote working and increased risk of cyber attacks. Additionally, increased cases of financial frauds in the last few years gave a rise to demand for directors & officers insurance.

Property insurance is also expected to contribute to the growing industry as it currently is the third-largest general insurance line with a share of 18.7%, growing by 13.2% in 2020. This was driven mostly by increased construction and real estate activities in Hong Kong.

The fastest growing segment is financial lines insurance, accounting for 8.3% share in 2020, growing by 60.7% in the year due to increase in premium prices following the upward adjustment of property values defined under the Mortgage Insurance Program.

Financial lines insurance, which accounted for 8.3% share in 2020, is the fastest growing segment. It grew by 60.7% in 2020 due to an increase in premium prices following the upward adjustment of property values defined under the Mortgage Insurance Program. The remaining 18.3% share consists of Motor, and marine, aviation, and transit (MAT) insurance.

Sahoo said after recovering in 2021, Hong Kong’s GDP growth is expected to slow down by 1.5% this year due to resurgence of COVID-19 cases. However, the general insurance industry will be able to overcome this hurdle, with an increase of 5.7% driven by strong performances of some of its general insurance lines.

“Hong Kong’s low insurance penetration, as a percentage to GDP, at 1.6% provides ample opportunities for general insurance growth. A gradual economic recovery, increasing cyber risks and growing commercial real estate activities are expected to support growth of general insurance over the next five years,” Sahoo concludes.

You may also like:

Women to bolster Fusion’s APAC underwriting team

AIA buys Hong Kong insurer Blue Cross for $278m from BEA

How YAS MicroInsurance puts a price on non-fungible tokens