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H.K. insurance market soft in Jan.-June period.

HONG KONG, Sept. 29 Kyodo

Hong Kong's insurance market remained soft in the first half of this year following a slowdown in the growth of premium income in 1998, the government said Wednesday.

Gross premiums for the first six months of 1999 amounted to 9 billion H.K. dollars, or a decline of 7.7% from the same period of 1998.

The growth of the insurance industry in 1998 in terms of premium income was just 4.2%, much lower than the 12.4% rise in 1997.

Statistics from the Office of the Commissioner of Insurance released Wednesday showed that the underwriting loss for the Jan.-June period of this year was 71 million H.K. dollars.

The loss for the whole of 1998 was 706 million H.K. dollars, much higher than the 59 million H.K. dollars posted in 1997.

"The insurance industry, particularly the general business sector, has begun to feel the impact of the Asian financial crisis," Commissioner of Insurance Alan Wong said.

Wong attributed the heavy underwriting loss in 1998 to the slowdown in economic activity, escalating claims and severe competition among market players.

General liability, which comprises mainly employees' compensation, and motor vehicle business were the two major loss-makers in 1998 and the first half of 1999.

In 1998, the total gross claims paid rose sharply to 12 billion H.K. dollars from 9 billion H.K. dollars in 1997.

Net claims incurred as a percentage of net earned premiums increased from 56.2% in 1997 to 61.3% in 1998.

Currently, Hong Kong has 209 authorized insurers, 347 insurance brokers and 45,406 insurance agents.

One U.S. dollar equals 7.75 H.K. dollars.
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Publication:Asian Economic News
Date:Oct 4, 1999
Words:282
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