Since January 2017, life insurance companies in Hong Kong have been required by the Insurance Authority to publish fulfillment ratios for their participating (par) products on an annual basis, in compliance with the Guideline on Underwriting Long Term Insurance Business (Other Than Class C Business), commonly referred to as “GL16”. Recent regulatory developments have led to revisions to the illustration guidance for par policies. In particular, illustration rate caps for par product benefit illustrations, effective from 1 July 2025, are intended to set minimum standards for the illustration rates used at the point of sale.
These recent regulatory developments could affect future fulfillment ratio disclosures by constraining the illustrated non‑guaranteed benefits for par products sold. However, at the time of drafting this report, the effects remain to be seen. This paper presents the updated Milliman Fulfillment Ratio Index based on the reporting year 2024 and provides an analysis of the historical change in the index. At the time of drafting this report, 2024 was the most recent year for which data were available across the market. (Insurers publish their fulfillment ratios at different times, some as early as January and others as late as September.)
Key discussion points:
- Fulfillment ratio and the latest changes to participating illustrations
- Types of non-guaranteed benefits typically offered by par products in Hong Kong
- Introduction to the Milliman Fulfillment Ratio Index
- Data on the index and market returns for reporting years 2017 to 2024
- Changes in company-level fulfillment ratios for 2024 versus 2023
- A closer look at the historical distribution of company-level fulfillment ratios
- What is next for fulfillment ratios