HK insurers see gross premiums drop 4.6% in Q1 2021
Long-term insurance revenue premiums declined 5.2%.
The Hong Kong insurance sector witnessed a 4.6% drop in total gross premiums to $20.3b (HK$157.4b) for Q1 2021, a direct result of a temporary impact caused by the premium payment pattern embedded in some short-term endowment products.
Data from the Insurance Authority (IA) revealed that the total revenue premiums of in-force long term business declined 5.2% to $17.9b (HK$139.1b). The figure comprised $14.6b (HK$113.3b) from non-linked individual life and annuity business, $1.22b (HK$9.5b) from linked individual life and annuity business, and $1.9b (HK$14.4b) from the retirement scheme business.
New office premiums, excluding the retirement scheme line, increased 16.1% to $5.2b (HK$40.7b). Some 24,000 Qualifying Deferred Annuity Policies (QDAP) were issued that attracted $206m (HK$1.6b) in terms of premiums, representing 4% of the total for individual businesses.
Restrictions on cross-boundary passenger traffic took a heavy toll on the new business derived from Mainland visitors which shrank 98.1% to around $12.9m (HK$100m) in Q1 2021. About 98% of the policies taken out by this group of customers were settled at regular intervals, with whole life, critical illness and medical insurance accounting for 36%, 35% and 19% of the policies respectively.
For the general business line, the gross and net premiums recorded were $2.4b (HK$18.3b) and $1.5b (HK$11.9b) in Q1 respectively, whilst overall underwriting profit rose to $66m (HK$512m). The gross and net premiums of direct business were $1.8b (HK$14b) and $1.3b (HK$9.8b) respectively.
Direct business produced an overall underwriting profit of $51m (HK$396m). Due to reduced claims, the accident & health business and employees’ compensation generated underwriting profits of $27.1m (HK$211m) and $14.6m (HK$113m) respectively. The motor vehicle business also returned a profit of $877,000 (HK$6.8m).
For the reinsurance inward business, gross and net premiums were $554m (HK$4.3b) and $284m (HK$2.2b), respectively. Overall underwriting profit surged to $15.1m (HK$117m), with primary contribution from the motor vehicle line partially offset by lower property damage profits.