HK's insurance business posts steady growth

Hong Kong's insurance business recorded a steady growth in 2003, according to the insurance business statistics for 2003 released by Hong Kong's Office of the Commissioner of Insurance (OCI) Tuesday.

Commissioner of Insurance Richard Yuen said that despite the outbreak of SARS and the slackened economic growth in 2003, total gross premiums (comprising general insurance business and long-term insurance business) of the Hong Kong insurance industry reached 102 billion Hong Kong dollars (13.08 billion US dollars), with a double-digit growth of 14.6 percent as compared with 2002.

The total amount of gross premiums was equivalent to about 8.3 percent of Hong Kong's gross domestic product (GDP).

General insurance business grew by 5.6 percent in 2003, down from the growth rate of 20.6 percent the year before. Total gross premiums grew to 24.77 billion Hong Kong dollars from 23.45 billion Hong Kong dollars in 2002.

The growth was mainly attributed to reinsurance inward businesswhich grew by 21.1 percent, as compared with 1.2 percent for direct business. "This is in tandem with the world trend of risingreinsurance costs following the contraction of global reinsurance capacity in 2002," Yuen said.

The general insurance business market was able to maintain its profitability with overall underwriting profit rising from 1.24 billion Hong Kong dollars in 2002 to 1.34 billion in 2003.

One major factor contributing to the increase in underwriting profit may be the better cost control as indicated by improvement in the underwriting expenses ratio from 35.5 percent to 32.6 percent, Yuen said.

Source: Xinhua