Total gross premiums of Hong Kong's insurance industry grew 26.4% to $197 billion last year, the Office of the Commissioner of Insurance says. This represented 12.2% of the city's Gross Domestic Product.

General insurance business saw an increase in gross premiums of 5.7% to $24.27 billion. Net premiums grew 5.3% to 17.06 billion with a overall retention ratio slightly dipping from 70.6% in 2006 to 70.3%.

The rise in gross premiums was driven by accident and health business which surged 16.4% to $6.24 billion, making up one-fourth of the total. The general liability business and property damage business were stable with gross premiums of $5.78 billion and $5.31 billion.

The pecuniary loss business recorded a rise of 23.9% in gross premiums to $1.5 billion, while motor vehicle business fell 5.3% in gross premiums to $2.65 billion due to intensive price competition.

The overall underwriting performance of general insurance business improved from $2.07 billion in 2006 to $2.4 billion last year due to better claims experience and release in claims reserve. The net claims incurred ratio was 49.6% compared with 51% in 2006.

Yearly contributions for retirement scheme contracts administered by insurers rose 10.6% to $16.19 billion. At the end of 2007 there were 70,295 retirement scheme contracts carrying net liabilities of $145.69 billion.

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