Industry Updates

Hong Kong General Insurance Market Performance for 2005

In 2005, gross and net premiums of general insurance business recorded a slight growth of 1.7% to HK$23,888 million and 2.7% to HK$17,033 million respectively.

Compared with 2004, overall underwriting profit of general business decreased from HK$1,957 million to HK$1,847 million last year. Property Damage business remained the largest contributor to the overall underwriting profit, with an underwriting profit of HK$682 million in 2005. The two other major contributors were Goods in Transit business and Pecuniary Loss business, with underwriting profits amounted to HK$412 million and HK$358 million respectively. Underwriting results of Motor Vehicle and General Liability business recorded deterioration, with a reduced profit of HK$282 million and an enlarged loss of HK$163 million respectively.

Performance of the two major classes of compulsory insurance business, i.e. Motor Vehicle business and Employees' Compensation business ("EC") both deteriorated. Underwriting profit of Motor Vehicle business decreased from HK$276 million to HK$213 million, which was attributable to an increase in net claims incurred ratio. Underwriting result of EC business also deteriorated from a loss of HK$264 million to a loss of HK$520 million due to a general decline in premium rates and worsened claims experience during the year.