The insurance industry's overall underwriting profit rose 60% from $1.34 billion in 2003 to $2.15 billion last year. The motor vehicle business saw a 10-fold surge, from a $52 million profit to $532 million, according to latest statistics from the Office of the Commissioner of Insurance.

The general insurance business gross premiums fell 7.2% to about $23 billion and net premiums slipped 4.5% to $16.3 billion.

The underwriting profit of ships business and goods-in-transit business recorded substantial improvements. Ships business saw a profit of $110 million, a turnaround from a $129 million loss. Goods-in-transit business improved from a profit of $176 million to $388 million. However, the underwriting profit of property damage business deteriorated from $732 million to $526 million.

Motor vehicle business surges

For the underwriting performance of the two major classes of compulsory insurance business, motor vehicle business surged from a profit of $52 million to $532 million, which was to a large extent due to the release of excess outstanding claims provisions by some insurers.

The underwriting profit of general liability business, which included the statutory employees' compensation business, dropped from $124 million to $33 million. Employees' compensation business deteriorated from a loss of $108 million to $266 million, which was mainly attributable to the general decrease in premium rates during the year.

The total revenue premiums of long-term in-force business collected by the insurance industry hit $1 trillion, an increase of 28.4% over 2003.

Linked life, annuity business expands

Non-linked individual life and annuity business grew 23% to $56.7 billion, while linked individual life and annuity business increased 72.4% to $25 billion. Retirement scheme business also expanded 6.3% to $16.2 million.

The year saw a surge of the total insurance benefits paid to individuals by 17%, to $31.9 billion.

The long-term insurance industry grew considerably last year. Benefiting from economic recovery and the low interest rate environment, new office premiums excluding retirement scheme business achieved a remarkable growth of 53.8% over 2003, at $38.6 billion.

Non-linked individual life and annuity business recorded an increase of 22.1% in new office premiums to $19.7 billion, while linked individual life and annuity business also went up 116.9% in new office premiums to $18.5 billion.

For more details of the provisional figures, click here.