Industry Updates

General Insurance Market Performance for the first quarter of 2006

In the first quarter of 2006, gross and net premiums of general insurance business recorded a decline of 2.2% to HK$6,795 million and 0.6% to HK$4,881 million respectively as compared with the corresponding period of 2005.

The overall underwriting profit of general insurance business substantially increased from HK$63 million to HK$637 million. This was solely attributable to the significant improvement in the underwriting performance of Ships business, turning from a loss of HK$533 million to a profit of HK$50 million. Property Damage business remained the largest contributor to the overall underwriting profit, albeit reducing from a profit of HK$259 million to HK$214 million, to be followed by Pecuniary Loss business and Motor Vehicle business, with a profit of HK$122 million and HK$107 million respectively.

As regards the two major classes of compulsory insurance business, i.e. Motor Vehicle business and Employees' Compensation business ('EC'), the underwriting profit of Motor Vehicle business decreased slightly from HK$98 million to HK$82 million whereas the underwriting loss of EC business increased from HK$24 million to HK$63 million due to an increase in net claims incurred ratio.