HSBC 2009 Annual Report Download - page 271

269
Analysis of non-life insurance risk – net written insurance premiums49,52
(Audited)
Europe
Hong
Kong
Rest of
Asia-
Pacific
North
America
Latin
America
Tota l
US$m US$m US$m US$m US$m US$m
2009
Accident and health ............................................ 94 160 7 3 23 287
Motor .................................................................. 123 14 20 – 234 391
Fire and other damage ........................................ 72 22 8 16 22 140
Liability ............................................................... – 15 4 – 2 21
Credit (non-life) .................................................. 35 – – 86 – 121
Marine, aviation and transport ............................ 7 9 4 – 17 37
Other non-life insurance contracts ..................... 24 32 1 12 58 127
Total net written insurance premiums ................ 355 252 44 117 356 1,124
Net insurance claims incurred and movement
in liabilities to policyholders .......................... (748) (107) (17) (96) (155) (1,123)
2008
Accident and health ............................................ 14 155 5 3 27 204
Motor .................................................................. 350 15 14 – 273 652
Fire and other damage ........................................ 150 26 3 4 22 205
Liability ............................................................... – 14 4 – 34 52
Credit (non-life) .................................................. 99 – – 144 – 243
Marine, aviation and transport ............................ – 11 4 – 24 39
Other non-life insurance contracts ..................... 49 28 – 15 29 121
Total net written insurance premiums ................ 662 249 30 166 409 1,516
Net insurance claims incurred and movement
in liabilities to policyholders .......................... (553) (121) (13) (98) (176) (961)
2007
Accident and health ............................................ 27 132 5 – 25 189
Motor .................................................................. 369 15 10 – 224 618
Fire and other damage ........................................ 178 23 7 2 19 229
Liability ............................................................... – 12 3 8 34 57
Credit (non-life) .................................................. 76 – – 157 – 233
Marine, aviation and transport ............................ – 12 4 – 18 34
Other non-life insurance contracts ..................... 30 24 – 30 24 108
Total net written insurance premiums ................ 680 218 29 197 344 1,468
Net insurance claims incurred and movement
in liabilities to policyholders .......................... (598) (90) (10) (79) (151) (928)
For footnotes, see page 291.
(Audited)
The above table of non-life net written insurance
premiums provides an overall summary of the
non-life insurance activity of the Group. Motor
business is written predominantly in Europe and
Latin America and represented the largest class of
non-life business in 2009. However, following a
decision to close to new business in the second half
of 2009, the UK motor book is now in run-off. Fire
and other damage to property business is written in
all major markets, most significantly in Europe.
Credit non-life insurance, which is originated in
conjunction with the provision of loans, is
concentrated in the US and Europe.
The main risks associated with non-life business
are underwriting risk and claims experience risk.
Underwriting risk is the risk that HSBC does not
charge premiums appropriate to the cover provided
and claims experience risk is the risk that portfolio
experience differs from expectations. HSBC
manages these risks through pricing (for example,
imposing restrictions and deductibles in the policy
terms and conditions), product design, risk selection,
claims handling, investment strategy and reinsurance
policy. The majority of non-life insurance contracts
are renewable annually and the underwriters have
the right to refuse renewal or to change the terms and
conditions of the contract at that time. Management
may decide to withdraw a product from the market
when it is no longer considered commercially viable,
such as the closure of the UK motor book to new
business in 2009.