Provisional data from the Insurance Authority shows Hong Kong’s direct general insurance (GI) segment recorded an underwriting profit of HK$739.3m (US$94m) in Q2 2024, more than double the HK$311m underwriting profit of Q2 2023.
The data, released Friday (31 Aug) and excluding direct inward reinsurance numbers, shows strong underwriting results in the General Liability and Pecuniary Loss lines, which more than offset the HK$182m underwriting loss seen by the Accident & Health (A&H) segment.
The special administrative region’s GI segment also saw gross written premiums (GWP) rise slightly to HK$12.49bn compared to HK$12.04bn in Q2 2023. However, gross claims also rose, up 12% to HK$6.6bn.
Overall, in the first half of the year, GWP for Hong Kong’s direct insurance segment increased 3.2% to HK$27.8bn. Underwriting profit jumped 95.4% to HK$1.4bn despite gross claims rising 10% to HK$13.27bn.
Gross premiums
By gross premiums, A&H is the largest line of business in Hong Kong’s GI market, and GWP rose 12.5% YoY in the second quarter to HK$4.32bn, helped by growth in group medical business and steady demand for travel insurance.
However, gross claims also rose by 12% to HK$3.4bn, with A&H recording an overall underwriting loss of HK$182.2m on Q2 — almost identical to the HK$183m loss seen in quarter 1.
General Liability’s GWP fell to HK$3.24bn in Q2 2024, a 1.5% decrease compared to the year prior. However, the Motor Vehicle segment saw a notable boost, with premiums rising from HK$1.32bn in Q2 2023 to HK$1.45bn this year, representing an increase of approximately 9.8%.
The Property line of business remained stable, with premiums increasing marginally from HK$1.71bn in Q2 2024 or growth of around 0.3%.
Among the smaller sectors by GWP, Aircraft saw a significant rise in premiums, nearly doubling from HK$18.8m in Q2 2023 to HK$36.1m in Q2 2024%, with air travel approaching pre-pandemic levels.
However, the Pecuniary Loss line experienced a notable decrease, with premiums falling from HK$1.11bn Q2 year to HK$783.8m this year — a decline of about 29.5% due to cautious sentiment in the property market.
Gross claims
Examining gross claims, Accident & Health saw its 12% increase, while General Liability remained steady, with the HK$1.25bn recorded in Q2 2024 representing a rise of around 0.9%.
Motor saw a slightly more pronounced increase, with claims rising from HK$609m in Q2 2023 to HK$720m in Q2 2024.
Property Damage claims increased by around 28%, from HK$463m in Q2 2023 to HK$592m in 2024. Goods in Transit also saw a spike, reaching HK$71.3m in Q2 2024, an increase of around 18%. However, the line of business appears to have returned to stability following a huge surge in claims during the pandemic.
Meanwhile, the Shipping line of business saw a modest increase in claims, recording HK$123.3m in Q2 2024 compared to HK$118.7m in Q2 2023.
Underwriting result
Looking more closely at the jump in underwriting profit in Q2 reveals varied results across various lines of business in the special administrative region.
The most notable change was for General Liability, where the underwriting result increased significantly, from HK$111.8m in Q2 2023 to HK$405.3m in Q2 2024 — a rise of approximately 262.6%. The IA attributed the strong result to a better claims experience and the release of reserves.
However, the A&H line deteriorated year-or-year, with the underwriting result worsening from a loss of HK$154.2m in Q2 last year to a loss of HK$182.2m in Q2 this year. Despite steady increases in premiums, the A&H line of business has yet to recover after a difficult few years, including a HK$426.9m loss in Q4 2022.
The Motor Vehicle, Damage & Liability segment saw a positive change, with its underwriting result improving from HK$55.3m in Q2 2023 to HK$83.1m in Q2 2024, a 50% increase.
The Property Damage category exhibited stability, with underwriting profits increasing 5.6% to HK$153.2m in Q2 2024, with the segment putting behind two difficult quarters in Q3 and Q4 2023 due to two typhoons, record rainfall, and flooding in Hong Kong.
The Pecuniary Loss segment saw a notable increase in underwriting results, surging from HK$97.1m in Q2 2023 to HK$273.7m in Q2 2024 — a rise of approximately 181.9%. This result occurred despite a decrease in gross premiums and an increase in gross claims, with the IA explaining the result was due to lower payment of upfront commission for the Mortgage Guarantee business.
First half performance
Overall in the first half of the year, GWP for the direct insurance segment increased to HK$27.8bn, up 3.2% compared to 1H 2023.
This was helped by gross premiums of A&H, which rose 12.5% to reach HK$11.7bn, while Property and Motor business rose to HK$3.4bn (up by 3.4%) and HK$2.8bn (up by 8.5%), respectively. GWP of Pecuniary Loss, which includes Mortgage Guarantee business, fell 35% to HK$1.3bn.
Hong Kong’s direct general insurance segment generated an overall underwriting profit of HK$1.4bn (up by 95.4%), with its net claims incurred ratio dipping slightly from 60.8% to 58.5%. Aligned with the Q2-specific results, General Liability reported a strong underwriting profit of HK$815m, up by 92.2%, while Pecuniary Loss saw a 128% increase to HK$545m.
