1. The Trend and Risk of Insurance Industry in HK

2. Introduction Insurance
The equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium and duty of care
Risk management

3. History Around 2500BC 1792BC Old Babylon Ancient Egypt Roman Empire
Babylonians
Code of Hammurabi

4. When was the 1st insurance contract being invented?

5. When was the 1st insurance contract being invented?
In Genoa

6. History 1693 1756 1762 Edmond Halley Joseph Dodson Equitable Society
Silesia Breslan城
哈雷死亡表
1756
Joseph Dodson
1762
Equitable Society
1st insurance company in the world

7. Insurance in HK Begin in 1841
After Qing Government’s defeat in the Opium War
HK as an entrepot
council-like insurance companies

9. Insurance in HK Until 30 September 2006
Pure general insurers Pure long-term insurers Composite insurers--- 19
Total: 181 authorized insurers in Hong Kong

10. Insurance in HK
Sources: The Hong Kong Federation of insurers <

11. Development of Insurance Industry
Three Areas
World’s
China’s
Hong Kong’s

12. Trend of World’s The Incident 911 Aware of safeness
Emphasize on insurance

13. Trend of China’s Reformation Rapid development Past: Superstitious
Now: Open-mind

14. 11th Five-Year Plan expects double of income of 2005 in 2010, beyond RMB1000 billion
Insurance will grow rapidly

15. Trend of Hong Kong’s Well-developed Saturated market
Increasing premium

16. Three measures by Hong Kong’s
Reinsurance
Diversification of services
CEPA →Migrate business to Mainland

17. Statistic source of data

18. Trend of Premiums

19. Trend of Individual Life Insurance

20. Top 10 Long Term Business Insurers by office premiums of In-force Business in 2004
Ranking
Name of Insurers
Abbreviated Name
Office Premiums $m
Market Share % 1.
American International Assurance Company (Bermuda) Limited
AIA (Bermuda)
16,941
17.2 2.
Manulife (International) Limited
Manulife (Int'l)
12,155
12.4 3.
HSBC Life (International) Limited
HSBC Life
11,697
11.9 4.
Prudential Assurance Company Limited - The
Prudential (UK)
8,423
8.6 5.
AXA China Region Insurance Company (Bermuda) Limited
AXA China (Bermuda)
5,833
5.9

21. Market share of Long Term Business Insurers by Office Premiums of In-force Business in 2004
Source of information: the Hong Kong Insurance Business Statistics 2004 released by the Office of the Commissioner of Insurance in September 2005

22. Case Study

23. Case
The insured applied for a life policy and undertook a medical examination at the insurer's appointed clinic. The application was accepted by the insurer at an increased premium. Later, the insured passed away due to a ruptured aortic aneurysm and pneumonia. The insurer subsequently rescinded the policy from inception as an echocardiogram revealed that the insured had suffered from a tachycardia attack, ectopic heart beat and ischcaemic change two years before the policy application.

24. Should the insured be awarded the death benefit ?

25. Answer : NO Reason: Non-disclosure
a medical examination had been provided by the insurer
the onus to disclose all his past medical history devolved upon the insured

26. Noteworthy Points
Disclose fully and accurately all information in the application form.
Check personally if all the facts are included in the application form. Your signature on the form is taken as evidence that you are satisfied with the facts
Understand the scope of coverage
Read the policy, in particular any exclusion clauses

27. Risk of the Insurance Industry
Internal Risk -Fraud
External Risk -Adverse Selection -Moral Hazard -Fraud

28. Internal Risk Arise from the immoral act of the agent.
Use the Unreal information to Meet the sales quota
Cheat the commission and bonus of the company

29. External Risk Illegal group recruit some people in mainland
Those people are willing to offer their eye
Illegal group make them blind
Get the large amount of claim from the insurance company