Solid results for HK-listed Chinese life and P&C insurers
First half outcomes for Hong Kong listed life and P&C insurers are strong, although each sectors face varied challenges.
For the listed life insurers, combination first-year premiums fell by 24% from the identical interval final yr primarily due to regulatory restrictions on gross sales of short-term saving merchandise and elevated competitors from different wealth-management merchandise.
In the meantime, the insurers additionally reported a median 9% progress (not annualised) of their embedded worth (EV) in contrast with year-end 2017, regardless of a pointy lower within the worth of recent enterprise (VNB) primarily pushed by quantity lower.
“The six listed Chinese language life insurers reported decrease new enterprise of their first half outcomes, however their credit score standing was supported by wholesome progress of their in-force books and powerful capitalisation,” says Edwin Liu, a Moody’s affiliate analyst.
“In the meantime, the 5 listed conventional Chinese language P&C insurers reported weaker profitability, which testifies to continued challenges of their predominant motor enterprise,” Liu added.
On the P&C aspect, the listed Chinese language insurers reported complete premium progress of 15% within the first six months of 2018 from a yr in the past, powered by a 38% surge in non-motor premiums, which greater than offset weak progress of solely 6% in motor premiums.
Moody’s expects this divergence to proceed as a result of insurers stay targeted on growing non-motor insurance coverage, specifically legal responsibility and agriculture insurance coverage, which take pleasure in higher underwriting profitability than motor insurance coverage.
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