Key figures about the Hong Kong General Insurance market

1. HongKong
General
Insurancemarket
Laurent Charlier, June 2018

2. 3/ General Insurance market in 2017
USD 6 Bo
(approx.)
1/ HK economy
Executive summary
GDP of USD 320 Bo in 2016 for 7.3 Mo inhabitants.
GDP per capita of USD 43,500
HK is among the top 15 richest countries
More than 300,000 SME, almost 4,000 regional
headquarters and regional offices, few hundreds of
financial institution
2/ Four pillars in the HK economy
60% of
the GDP
G.W.P*
112
insurers
+ 4% vs
2016
Insurance Cies Growth
4/Challenges for the HK insurance market
• Increase the performance (distribution, claims, products,
underwriting) through digitalization
• Regulatory changes to come with the newly created Insurance
Authority (IA)
• Product innovation
• Distribution model
Financial Services
Tourism
Trading and logistics
Professional Services
Gross Written Premium / Direct and reinsurance inward

3. HK insurance market
• Direct insurance and reinsurance inward market is 47.5 Bo HKD in 2017 (Gross written
premium)
• Accident & Health is the most important line of business with a share of 36%.
• General Liability is the second one with workers compensation representing approx. 70% to
80% of this line of business.
• From Swiss Re’s opinion, GI market in HK will grow by 4% per year between 2018 and 2027.
The market will rise up to HKD 72 Bo gross written premium.
• The growing line is without any doubt the accident and health insurance which could be
explained by the never ending increase of the medical costs and the increase of the wealthy
population in HK.
• Buying decision is mostly if not only directed by the pricing
Market figures
Property , 8%
Motor, 8%
Marine
Aviation,
Transp , 8%
Acc & health
, 44%
General
Liability ,
24%
Others , 8%
Property ,
11%
Motor, 11%
Marine
Aviation,
Transp , 8%
Acc & health , 36%
General
Liability ,
25%
Others , 5%
• Regulation is still very flexible
• Free market and low level of taxes
• Dynamic economy
• Entry market for the northeast Asia inc. China
• Insurance penetration remains relatively low
with an average insurance of 6500 HKD per
inhabitant.
• Insurance market is very fragmented with
112 insurers hence very competitive
• Appetency for insurance is very low
• Jurisdiction with China is still very different
• Economy is more and more oriented toward
financial services.
2017
2027

4. Hong Kong insurance market
At Dec 2017, we have more than 90,000 insurance agents and their representatives. We could estimate that 60% of them are intermediating life and GI insurance
business. Only 10% of them are focusing only on GI.
At the same date, we have 759 insurance brokers. We could distinguish three type of insurance brokers:
• Top tier brokers made of the big 4.
• Tier 2 brokers with international broker such as Lockton, Howden and strong local brokers such as Nova, Storfield, Pacific prime or Abacare. Abacare and
Pacific Prime are primarily focusing on health insurance
• Tier 3 brokers : small local brokers not focusing only on GI insurance but focusing on wealth management as well
Insurance brokers are self regulated by 2 professional bodies, HKCIB and PIBA.
HK insurance players
• The top ten insurance companies in HK have a market share of 45%
only.
• Behind the top 10, we find lots of different types of insurer as Lloyds
syndicates, insurance companies not incorporated in HK, as well as
the big European players such as Generali or Allianz.
• Motor insurance, employers compensation, health insurance are the
loss making line of business with CoR often above 100%.
• In 2017, combination of the bad results of the above lines and
typhoon Hato, the underwriting performance of the industry has
seen a loss of HKD 800 million.
• Business is mainly done in HK and Macau. However, few companies
are providing reinsurance support in Taiwan or Korea and Japan.
• Regulations is considered as light in HK. Companies are under the
supervision of the Insurance Authority (IA) newly created with the
objectives to be financially independent from the government. 8.3%
6.5%
5.7%
5.0%
4.4%
3.8%
3.6%
3.1%
2.8%
2.8%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%
AXA GI
Bupa Asia
China Taiping
Zurich
Bank ofChina
AIG
QBE
Chubb
Blue Cross
Asia Insurance Company
Top 10 insurers market share by GWP for the direct and reinsurance business in 2016