The Office of the Commissioner of Insurance has released provisional statistics for the Hong Kong insurance industry for the first half of 2013, which show that its total gross premiums amounted to HKD143.7bn (USD18.5bn), representing an increase of 14.5 percent over the corresponding period last year.
The greatest portion of total revenue premiums, those for long term in-force business, was HKD120.9bn in the first half of 2013, increasing by 14.9 percent over the same period of 2012. Total revenue premiums for individual life and annuity business, non-linked and linked, increased by 14.6 percent to HKD82.8bn and by 20.6 percent to HKD28.2bn, respectively. Contributions to retirement scheme business grew slightly by 2.6 percent to HKD8.2bn.
New premiums (excluding retirement scheme business) for long term business for the first six months of 2013 increased by 21.1 percent to HKD45.8bn, compared with the same period of 2012. Both individual life and annuity, non-linked and linked, business recorded premium growth, with the former increasing by 18 percent to HKD35.1bn and the latter increasing by 33.4 percent to HKD10.5bn in terms of new premiums.
In respect of policies issued to Mainland Chinese visitors, new premiums amounted to HKD6bn, representing 13.1 percent of total new premiums (HKD45.7bn) for individual business in the first half of 2013.
In the same period, gross and net premiums of general insurance business recorded a growth of 12.5 percent to HKD22.8bn and 14.1 percent to HKD16.2bn, respectively, compared with the corresponding period in 2012. However, overall underwriting profit declined from HKD1.6bn to HKD1.5bn, despite the increase in the underwriting profit of direct business to HKD1.2bn in the first six months of 2013, from HKD1bn in the corresponding period in 2012.
The announcement of the insurance statistics followed a recent confirmation by Financial Secretary John C Tsang that the Government remains committed to furthering the development of Hong Kong's insurance sector, which has become one of the major pillars of its financial services sector.
He had then reminded his audience that the sector has recorded annual double-digit growth for more than a decade and, in terms of both insurance density and penetration, Hong Kong now ranks second in Asia. The Government has also been working closely with the insurance industry in taking forward a number of key regulatory initiatives, including setting up an independent Insurance Authority and establishing a Policyholder Protection Fund.
In addition, as included in this year's Budget, there is a proposal to reduce the profits tax on the offshore insurance business of captive insurance companies by 50 percent, with the intention of attracting more enterprises to form captive insurance companies in Hong Kong.A comprehensive report in our Intelligence Report series which studies the 20 main offshore jurisdictions which offer captive insurance regimes is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report11.asp
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