Industry Updates

Market Performance of the Hong Kong Insurance Industry in 2007

In 2007, gross and net premiums of general insurance business recorded a modest growth of 4.8% to HK$24,057 million and 5.0% to HK$17,008 million respectively compared with 2006. Overall underwriting profit enhanced from HK$2,067 million to HK$2,301 million. Property Damage business, registering a profit of HK$764 million, remained the largest contributor to this outcome.

On direct business, gross and net premiums increased by 5.6% to HK$19,189 million and by 7.5% to HK$14,033 million respectively in 2007. Despite an expanding fleet of insured vehicles, gross premiums of Motor Vehicle business contracted by 2.1% to HK$2,489 million. On the other hand, Statutory Ships business benefited from a wider scope of vessels prescribed under the Merchant Shipping (Local Vessels) Ordinance effective from 2 July 2007 and saw a rise in gross premiums by 45.5% to HK$40 million.

Direct business managed to sustain an underwriting profit of HK$1,161 million in 2007 compared with HK$1,116 million in 2006 due to Non-Statutory Ships business whose underwriting loss lowered from HK$238 million to HK$137 million.

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 significantly from HK$158 million to HK$18 million due to soft market conditions and adverse claims experience. Employees' Compensation business, underwriting loss widened from $85 million to HK$114 million.