General insurance industry in Hong Kong to cross $10bn in 2026, forecasts GlobalData

Hong Kong general insurance industry is projected to grow at a compound annual growth rate (CAGR) of 6.6% from HKD57.2bn ($7.4bn) in 2021 to HKD78.6bn ($10.1bn) in 2026, in terms of gross written premiums (GWP), according to GlobalData, a leading data, and analytics company.

As per GlobalData, growth in the Hong Kong general insurance industry will be supported by growing demand for liability insurance as well as strong performance in property insurance driven by expansion in real estate and construction activities in the country.”

Jeneshree Sahoo, Insurance Analyst at GlobalData, comments: “After recovering by 6.1% in 2021, the Hong Kong GDP growth is expected to slow down to 1.5% in 2022 due to the resurgence in the number of COVID-19 cases. Despite these challenges, the general insurance industry is forecasted to grow by 5.7% in 2022, driven by a strong performance from liability, property, and financial lines insurance.”

Personal accident and health (PA&H) is the largest general insurance line in Hong Kong with a GWP share of 30.8% valued at HKD16.9bn ($2.2bn) in 2020. It declined by 4.8% in 2020 due to pandemic-led lockdown and outbound travel restrictions. With ease in these restrictions, PA&H line is expected to recover from 2022 and grow at a CAGR of 5.1% during 2021-2026 to reach HKD21.4bn ($2.7bn) in 2026.

Liability insurance is the second-largest line with a GWP share of 23.9% in 2020. It grew by 8.8% in 2020, driven by growing demand for cyber insurance policies due to remote working that increased the risk of cyber-attacks during the pandemic. In addition, increased cases of financial frauds in the last few years have led to a rise in the demand for directors & officers (D&O) insurance.

Property insurance, which is the third-largest general insurance line with a share of 18.7%, grew by 13.2% in 2020 driven by increased real estate and construction activities in the country.

Financial lines insurance, which accounted for 8.3% share of in 2020, is the fastest growing segment. It grew by 60.7% in 2020 due to an increase in premium prices following the upward adjustment of property values defined under the Mortgage Insurance Program. The remaining 18.3% share consists of Motor, and marine, aviation, and transit (MAT) insurance.

Sahoo concludes: “Hong Kong’s low insurance penetration, as a percentage to GDP, at 1.6% provides ample opportunities for general insurance growth. A gradual economic recovery, increasing cyber risks and growing commercial real estate activities are expected to support growth of general insurance over the next five years.”