Cyber threats to grow HK’s insurance industry

AUSTRALIA’S GENERAL INSURANCE INDUSTRY TO BALLOON IN 2026

AUSTRALIA

The general insurance industry in Australia is predicted to grow at a compound annual growth rate (CAGR) of 6.4% from AU$73.29bn ($54.6bn) in 2021 to AU$99.87bn ($73.6bn) in 2026, in terms of direct written premiums (DWP), according to a report by data and analytics company GlobalData.

GlobalData said it expects a strong economic recovery for Australia, with increasing vehicle sales and growing demand for natural catastrophe policies supporting the growth of Australia’s general insurance sector during the review period.

Personal accident and health (PA&H) insurance, which is the largest segment in the Australian general insurance industry, accounts for 36.7% of the DWP in 2021. The PA&H segment, which are mostly sold as riders or additional insurance not covered by the public health insurance system, grew by 0.7% in 2021 against a decline of 0.2% in 2020. PA&H insurance was supported by increase premium rates by the Australian government amidst rising medical costs. The insurance segment is expected to grow at a CAGR 4.5% between 2021 to 2026.

Meanwhile, motor insurance is the second largest segment, which accounted for 24.2% of general insurance DWP in 2021. After a slow down in 2020, the segment shook off its lull by growing by 6% in 2021 on the back of growing motor vehicle sales. This segment is expected to increase by 6.4% between the review period of 2021 to 2026.

Natural calamities insurance

Property insurance is the third-largest segment with 22.3% share in 2021. The segment grew by 9.5% in 2021, driven by the demand for natural catastrophes policies. Increased number of natural calamities in the last two years, such as hailstorms, bushfire and floods, have prompted insurers to increase the price for these policies. working and increased risk of cyber attacks. Additionally, increased cases of financial frauds in the last few years gave a rise in the demand for directors and officers insurance.

Property insurance is also expected to contribute to the growing industry as it currently is the third-largest general insurance line with a share of 18.7%, growing by 13.2% in 2020. This was driven mostly by increased construction and real estate activities in Hong Kong.

Fastest growing insurance lines

The fastest growing segment is financial lines insurance, accounting for 8.3% share in 2020, growing by 60.7% in the year due to increase in premium prices following the upward adjustment of property values defined under the Mortgage Insurance Program.

Financial lines insurance, which accounted for 8.3% share 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 said after recovering in 2021, Hong Kong’s GDP growth is expected to slow down by 1.5% this year due to resurgence of COVID-19 cases. However, the general insurance industry will be able to overcome this hurdle, with an increase of 5.7% driven by strong performances of some of its general insurance lines.

“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,” Sahoo concludes.

Strong performance from liability, property, and financial lines insurance to boost the industry

Cyber threats to grow HK’s insurance industry

HONG KONG

Rising cases of cyber threats is actually helping the growth of the general insurance industry in Hong Kong which is estimated to reach more than $10bn by 2026 report by data and analytics firm GlobalData said.

The general insurance industry is projected to grow at a compound annual growth rate of 6.6% in terms of gross written premiums (GWP).

According to Jeneshree Sahoo, GlobalData insurance analyst, the growth was going to be driven by strong performance in liability insurance as well as property and financial lines insurance.

Currently, personal accident and health insurance is the largest general insurance line in Hong Kong with a GWP share of 30.8% or $2.2bn in 2020. It declined by 4.8% during the pandemic; however, with the expected easing of restrictions in Hong Kong, it is projected to grow at CAGR 5.1% in 2021 to 2026 reaching $2.7bn.

Meanwhile, liability insurance is the second-largest line with a GWP share of 23.9% in 2020. It grew by 8.8% in the year, driven by the growing demand for cyber insurance policies due to remote

Hong Kong’s low insurance penetration provides ample opportunities for general insurance growth

Hong Kong’s low insurance penetration provides ample opportunities for general insurance growth