Hong Kong’s general insurance industry is expected to reach a total value of HK$78.6 billion (US$10.1 billion) in 2026, according to data analytics firm GlobalData.
The industry’s value is forecast to rise at a compound annual growth rate (CAGR) of 6.6 per cent in terms of grow written premiums (GWP) over the coming years, rising from just HK$57.2 billion in 2021.
The growth in the industry is expected to be supported by the recovery of the personal accident and health sector post-pandemic, increasing demand for liability insurance services, as well as strong performance in the property insurance sector driven by real estate and construction services.
“After recovering by 6.1 per cent in 2021, the Hong Kong GDP growth is expected to slow down to 1.5 per cent in 2022 due to the resurgence in the number of Covid-19 cases,” said Jeneshree Sahoo, Insurance Analyst at GlobalData. “Despite these challenges, the general insurance industry is forecasted to grow by 5.7 per cent in 2022, driven by a strong performance from liability, property, and financial lines insurance.”
Personal accident and health (PA&H)
PA&H insurance, the largest segment of general insurance in Hong Kong with a GWP share of 30.8 per cent, valued at $16.9 billion in 2020, is expected to recover from 2022, following a 4.8-per-cent decline in 2020 due to pandemic-related lockdowns and international travel restrictions.
Between 2021 and 2026, the sector is projected to grow at a CAGR of 5.1 per cent, to reach a value of $21.4 billion.
Liability insurance and D&O
Liability insurance, the second-largest subdivision of Hong Kong’s insurance sector with a GWP share of 23.9 per cent in 2020, grew by 8.8 per cent in 2020. This was driven by growing demand for cyber insurance policies following the rapid adoption of remote working during the pandemic, which in turn led to an increased risk of cyber-attacks.
In addition, rising numbers of financial fraud cases in recent years has driven an increase in demand for directors and officers insurance.
Property and financial lines insurance
Property insurance, the third largest segment at 18.7 per cent, grew by 13.2 per cent in 2020 due to increased real estate and construction activities in Hong Kong.
Financial lines insurance, which accounted for a 8.3-per-cent share in 2020, grew by 60.7 per cent in 2020 due to an increase in premium prices following the upward adjustment of property values defined under the Mortgage Insurance Program.