Despite facing lower-than-expected economic growth, Hong Kong's insurance market remains robust and well-capitalized, according to Aon’s Q4 2024 Global Insurance Market Insights Report. The sector continues to attract international insurers, even though new business opportunities are limited. Corporate revenues are under pressure, leading to a closer examination of budgets, renewal costs, and insurance programs. Price reductions across various products, including Cyber and Financial Lines, highlight the competitive nature of the market. Insurers are adopting more aggressive pricing strategies for high-performing clients, while maintaining disciplined underwriting practices. Coverage terms generally remain unchanged, although enhancements are occasionally offered.

The general insurance market in Hong Kong is characterized by strong competition and abundant capacity across most segments. According to Dilys Chan, Chief Broking Officer of Commercial Risk Solutions in Hong Kong, this competitive environment has led to price reductions across all products. Insurers are particularly aggressive in their pricing strategies for well-performing clients, driven by growth ambitions and favorable loss performance. Large and complex risks are seeing double-digit rate reductions at renewal, while non-financial line products experience single-digit decreases. New players entering the market have added to the existing appetite from both international and regional insurers, ensuring that capacity remains plentiful, except in loss-impacted areas.

Underwriting flexibility has increased amid growing competition but remains disciplined overall. Most placements renew with expiring limits, though additional limits are available due to strong capacity. Deductibles are largely flat, with some reductions when competition intensifies. Coverage terms mostly renew unchanged, but some insurers offer enhancements. However, exclusions for per- and polyfluoroalkyl substances (PFAS) are becoming more common, especially for broad exclusions. Coverage for risks tied to Ukraine, Russia, Eastern Europe, and Myanmar remains restricted.

The casualty market is experiencing soft conditions and remains well-capitalized, with insurers competing for both new and renewal business. Exclusions for PFAS are widespread but can be negotiated for large and complex accounts. The cyber insurance market continues to soften, driven by ongoing competition and insurer growth ambitions, resulting in low double-digit rate reductions. The Directors & Officers segment is also soft, with ample capacity available for large and complex accounts, regardless of claims history. Property insurance remains competitive, supported by ample capacity, offering favorable pricing for well-performing risks. However, multinational property programs with natural catastrophe exposures face more moderate conditions.

While economic challenges persist, Hong Kong's insurance market demonstrates resilience through its competitive pricing and growing capacity. Despite the pressure on corporate revenues, the market continues to attract international insurers, ensuring a robust and dynamic environment. The availability of additional limits and flexible underwriting practices further underscores the market's adaptability. Although certain exclusions and restrictions apply, the overall market conditions remain soft to moderate, reflecting a balance between competition and disciplined risk management.