Industry Updates

General Insurance Market performance for the first half of 2006

In the first half of 2006, gross and net premiums of general insurance business recorded a decline of 4.3% to HK$12,132 million and 0.7% to HK$8,832 million respectively as compared with the corresponding period of 2005.

The overall underwriting profit of general insurance business substantially increased from HK$509 million to HK$1,360 million. This was mainly attributable to the significant improvement in the underwriting performance of Ships business, turning from a loss of HK$556 million to a profit of HK$3 million. Property Damage business remained the largest contributor to the overall underwriting profit, albeit reducing from a profit of HK$523 million to HK$409 million. With the significantly improved performance of Ships business, the underwriting result of direct business achieved a profit of HK$829 million in the first half of 2006, up from HK$154 million for the corresponding period of 2005.

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 slightly increased from HK$133 million to HK$135 million whereas EC business turned from a loss of HK$78 million to a profit HK$3 million due to a decrease in the net claims incurred ratio.