Industry Updates

Hong Kong General Insurance Market Performance for the first half of 2007

In the first half of 2007, gross and net premiums for general insurance business recorded a growth of 6.7% to HK$12,948 million and 5.9% to HK$9,355 million respectively as compared with the corresponding period of 2006. However, the overall underwriting result decreased from a profit of HK$1,360 million to HK$1,039 million for the period.

The underwriting profit of direct business dropped from HK$829 million to HK$599 million. This was essentially attributable to the deterioration in underwriting performances of Motor Vehicle business, being one of the major classes of compulsory insurance business, which recorded a fall in profit from HK$135 million to HK$16 million due to a general decline in premium rates; Ships business which suffered an increase in loss from HK$10 million to HK$97 million due to adverse claims experience; as well as Property Damage business which recorded a decline in profit from HK$223 million to HK$175 million caused by increased commissions.

As regards the other major class of compulsory insurance business, i.e. Employees' Compensation business, its underwriting result turned from a profit of HK$3 million to a loss of HK$25 million.