The insurance industry's overall underwriting profit fell to $1.039 billion in the first half of 2007, down 23.6% on the same period last year, the Office of the Commissioner of Insurance says.

During the period, gross and net premiums for general insurance business recorded growth of 6.7% to $12.948 billion and 5.9% to $9.355 billion.

On direct business, both gross and net premiums experienced a rise of 4.9% to $10.348 billion and $7.552 billion, primarily driven by strong growth in the medical business by $440 million in gross premiums and $379 million in net premiums.

The underwriting profit of direct business fell from $829 million to $599 million. This was attributed to the deterioration in underwriting performances of the motor vehicle business, being one of the major classes of compulsory insurance business, which recorded a fall in profit from $135 million to $16 million due to a general decline in premium rates; the ships business which suffered a rise in loss from $10 million to $97 million due to adverse claims experience; as well as property damage business which recorded a profit fall from $223 million to $175 million due to increased commissions.

The employees' compensation business underwriting result turned from a profit of $3 million to a loss of $25 million.

Reinsurance rise

On reinsurance inward business, gross and net premiums grew 14.8% to $2.6 billion and 10.3% to $1.803 billion, due to the rise in property damage reinsurance written in the period. The underwriting profit fell from $530 million to $440 million due to the deterioration in claims experience recorded.

Total revenue premiums of long term in-force business rose 17.6% to $76.827 billion. Contributions of retirement scheme business rose 18.5% to $10.836 billion. Total insurance benefits paid to people grew 32.9% to $26.644 billion.

New office premiums (excluding retirement scheme business) of long term businesses rose 22.1% to $32.819 billion. The non-linked individual life and annuity business grew 9.2% to $9.289 billion in terms of new office premiums. New office premiums of linked individual life and annuity business grew 41.5% to $23.311 billion.

Office premiums in respect of the new policies issued to Mainland visitors amounted to $1.78 billion, representing 5.4% of total new office premiums.

Provisional statistics in detail can be downloaded here.