Author
Bowtie Team
Updated on
2025-05-31
Disclaimer: This article is translated with the assistance of AI.
Have you ever wondered how the insurance industry developed in Hong Kong, who the first operating company was, and how much they pay out annually? Read on for tips and useful information.
When Did Insurance Companies First Appear in Hong Kong?
According to “Thick and Beneficial to the Public – A History of Insurance in Hong Kong,” the earliest and most representative entity in Hong Kong’s insurance industry was the Canton Insurance Society, founded in Guangzhou in 1805 by Dent & Co. and Magniac & Co. Canton Insurance Society . In 1832, Dent & Co. reorganized into Dent & Co., and Magniac & Co. restructured into Jardine Matheson & Co., with the Canton Insurance Society then operated alternately by Dent & Co. and Jardine Matheson & Co. At that time, the Canton Insurance Society primarily provided insurance services for goods transported by foreign firms to China.
In 1835, Dent & Co. withdrew from the Canton Insurance Society and established its own operation, the Union Insurance Society, in Guangzhou. Jardine Matheson & Co. built upon the Canton Insurance Society to form the Canton Insurance Company. In 1841, after Hong Kong’s cession, both the Canton Insurance Company and the Union Insurance Society relocated from Macau to Hong Kong, marking a significant milestone in Hong Kong’s insurance development. Incidentally, due to rampant piracy at the time, Jardine Matheson & Co. purchased warships, such as the 351-ton “Falcon,” to protect insured cargo ships, illustrating that the foreign firms handling insurance were far from simple.
- * “Thick and Beneficial to the Public – A History of Insurance in Hong Kong” was written by Feng Bangyan and Rao Meijiao
Categories and Definitions of Insurance Companies
Insurancehas two major categories: General Insurance Business and Long-term Business . Some companies also operate Composite Business , which means they handle both general business and long-term business.
| General Insurance Business | |
| General insurance can be understood as providing coverage for losses other than death, such as injuries from accidents or asset losses. | |
Based on the scope of coverage, general insurance includes four categories:
|
Based on business types, it can be divided into 17 categories:
|
| Long-term Business |
| Long-term business primarily consists of life insurance and can be categorized into 9 types based on the nature of the business . |
|
How to Operate an Insurance Company?
In today’s world, operating an insurance company in Hong Kong requires meeting various requirements.
In fact, any company intending to operate insurance business in Hong Kong can apply for authorization from the Insurance Authority according to the Insurance Ordinance, and only after approval will they be eligible to operate. Additionally, they need to meet requirements such as adequate capital and solvency margins .
According to capital requirements, the current minimum paid-up capital is HK$10 million; for companies operating composite business, which involves both general and long-term business, or those planning to operate in statutory classes of insurance business, the minimum paid-up capital is HK$20 million. Furthermore, these amounts are only the minimum requirements, and the actual level must be maintained at an appropriate safe level.
In terms of Solvency margins , the requirements differ for general business and long-term business. According to information from the Insurance Authority’s website:
| Insurance companies operating general business | Insurance companies operating long-term business |
The solvency margin is based on the larger of the following:
However, the solvency margin must be at least HK$10 million, or HK$20 million if the company operates in statutory classes of insurance business. |
The solvency margin is based on the larger of the following:
|
- * Liabilities for claims that have been reported to the insurance company by the annual/period settlement date but have not been settled.
How Many Insurance Companies Are There in Hong Kong?
According to the Hong Kong Insurance Authority’s figures, as of September 30, 2020, there are a total of 165 authorized insurance companies in Hong Kong. Among them, 91 are general business insurance companies, 53 are long-term business (or life) insurance companies, and the remaining 21 are composite insurance companies. .
Of these, 95 are registered in Hong Kong; the rest are from 21 different countries and regions, such as 12 registered in Bermuda, 10 in the United Kingdom, and 9 in the United States.
Bowtie (Bowtie Life Insurance) was authorized by the Insurance Authority in December 2018, becoming the first virtual insurance company . It uses innovative technology and medical expertise to provide Hong Kong residents with voluntary medical insurance, life insurance, critical illness, accident, and cancer insurance plans.
How do Policyholders Evaluate Credibility of Insurance Companies?
When purchasing insurance, in addition to comparing prices and coverage scope, credit ratings are also worth paying attention to.
Insurance Credit Ratings
Credit ratings refer to the ratings obtained by insurance companies from credit rating agencies. The most internationally recognized rating agencies are Standard & Poor’s, Moody’s, and Fitch. A higher rating indicates a more stable financial condition for the company, which in turn provides greater confidence in its ability to pay claims.
| Rating Table of the 3 Major Credit Rating Agencies | |||
| S&P Standard & Poor’s
Standard & Poor’s |
Moody’s Investors Service
Moody’s Investors Service |
Fitch Ratings
Fitch Ratings |
Rating Definitions |
| AAA | Aaa | AAA | Investment Grade |
| AA | Aa | AA | |
| (including AA+/AA/AA-) | (including Aa1/Aa2/Aa3) | (including AA+/AA/AA-) | |
| A | A | A | |
| (including A+/A/A-) | (including A1/A2/A3) | (including A+/A/A-) | |
| BBB | Baa | BBB | |
| (including BBB+/BBB/BBB-) | (including Baa1/Baa2/Baa3) | (including BBB+/BBB/BBB-) | |
| BB | Ba | BB | Non-Investment Grade |
| (including BB+/BB/BB-) | (including Ba1/Ba2/Ba3) | (including BB+/BB/BB-) | |
| B | B | B | |
| (including B+/B/B-) | (including B1/B2/B3) | (including B+/B/B-) | |
| CCC | Caa | CCC | |
| (including CCC+/CCC/CCC-) | (including Caa1/Caa2/Caa3) | (including CCC+/CCC/CCC-) | |
| CC | Ca | CC | |
| C | C | C | |
How Much are the Annual Premiums Collected and Amounts Compensated?
According to statistics from the Hong Kong Insurance Authority, in 2019, the total gross premium income for general insurance business increased by 4.4% to HK$55.435 billion, and the overall gross claims paid and net claims amounted to HK$1.3 billion and HK$4.11 billion, respectively.
Additionally, in 2019, the total premium for long-term business policies was HK$511.5 billion, up 10.8% year-on-year. Long-term business is still dominated by individual life insurance, with effective policy premiums reaching HK$440.2 billion, up 3.3% year-on-year, accounting for 86.1% of the market total. The number of related policies in 2019 was 13.2 million, with net liabilities amounting to HK$2,120.3 billion. .
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