The long-term insurance industry grew prominently in the first half of 2004. Benefiting from the economic recovery and the persistent low interest rates, the new office premiums - excluding the retirement-scheme business - achieved a remarkable growth of 96.8% over the same period of 2003 to reach $19.74 billion.

The major component of the long-term business, the individual life and annuity (non-linked) business, recorded an increase of 56% in new office premiums to $10.8 billion.

Another major component of the long term business, the individual life and annuity (linked) business, also increased by 202.9% in new office premiums to $8.7 billion in the first half of 2004.

General insurance gross premiums drop 2.9%

The Office of the Commissioner of Insurance said the gross premiums of general insurance business in the first half of 2004 dropped 2.9% to $12.3 billion as compared with the corresponding period of 2003.

Net premiums, on the other hand, increased by 1.8% to $8.76 billion due to higher retention rate.

The overall underwriting profit of general insurance business improved from $0.8 billion to $1.28 billion as compared with the corresponding period in 2003. 

Ships business reversed loss to profit

The ships business and goods-in-transit business both recorded substantial improvement. The ships business reversed from a loss of $71.4 million to a profit of $127 million while the profit of the goods-in-transit business increased from $93.5 million to $193 million.

The underwriting profit of the property damage business however deteriorated from $453 million to $371 million.

The underwriting performance of the two major classes of compulsory insurance business - the motor vehicle business and general liability business (majority statutory Employees' Compensation business ) - improved. 

The motor vehicle business reversed from a loss of $16.5 million to a profit of $213 million, which was in a large extent due to release of outstanding claims provisions by some insurers. 

As for the general liability business, the underwriting profit improved from $43.2 million to $111 million despite the deterioration of the loss of employees' compensation business from $20.3 million to $32.2 million.

Long-term business revenue premiums up 37.9%

In respect of long-term business, the total revenue premiums of long-term in-force business collected by the insurance industry amounted to $48.47 billion in the first half of 2004, an increase of 37.9% over the same period of 2003.

As for revenue premiums of each major class, the individual life and annuity (non-linked) business grew by 31.6% to $27.4 billion; the individual life and annuity (linked) business increased by 105.5% to $11.99 billion; and the retirement-scheme business also expanded by 8% to $7.86 billion. 

On the benefit side, the total insurance benefits paid to individuals during the period increased by 42.7% to $16.45 billion.