Insurance premiums come not far behind taxes in the popularity stakes, even if gripes about both typically elicit a similar response - 'tough luck'. One might as well moan about mortality.
Employers' complaints about expensive worker compensation insurance, however, have led the government to consider assuming responsibility for its provision.
Last week, the Hong Kong Federation of Insurers hit back, saying government intervention would cost jobs and lead to higher taxes. Is this an industry simply protecting its own, or does a market failure exist that justifies such draconian action by the government?
All employers must provide Employees' Compensation (EC) in the event workers are injured on the job.
Complaints about high premiums aside, it can be difficult to get any coverage whatsoever for certain occupations, such as abseiling window cleaners and minibus road runners.
Yet, any notion that the local insurance industry is selectively creaming off the best business is not borne out by its dismal returns.
While more than 70 insurers compete in the $4 billion EC market, it continues to record losses. Last year, the deficit on liability payments to injured workers was $103 million, and in 2002, it was $162 million. With the HKFI calculating accumulated industry losses at $5 billion in the past decade, it might seem premiums have been set too low, not too high.
