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Taiwan: Life insurance sector posts lower premium income in 2020 as new business suffers hit – Asia Insurance Review

The total premium income of the life insurance industry from January to December last year reached NT$3,025bn ($108bn), a decrease of 7.9% from the previous year, according to statistics from the Life Insurance Association (LIA-ROC).

First-year life premiums fell to NT$784bn last year, plunging by 28.7% compared to 2019. Renewal premium income reached NT$2,241bn last year, an increase of 2.5% from 2019.

A summary of the life insurance sector’s premium income last year is as follows:

Type

2020 Premiums NT$m

2019 Premiums

NT$m

Change

%

First-year

Traditional

576,590

859,543

-32.9

Investment related

207,122

239,939

-13.7

Subtotal

783,712

1,099,482

-28.7

Renewal

Traditional

2,162,242

2,105.644

+2.7

Investment related

79,411

80,335

-1.2

Subtotal

2,241.653

2,185.979

+2.5

Total

Traditional

2,738,832

2,965,187

-7.6

Investment related

286,533

320,274

-10.5

Total

3,025,365

3,285,461

-7.9

There are two main reasons for the performance of the life insurance industry in 2020:

Traditional insurance products: The interest rate on insurance policy liability reserves was lowered twice at the beginning of last year and the middle of the year. Consequently, the interest rate on variable-interest insurance policies was lower, and the buying momentum of traditional insurance policies was weaker.

Investment insurance products: In addition to the impact of the COVID-19 pandemic, the Insurance Bureau has issued new measures for investment-type insurance policies. Sales of investment-related insurance products declined as insurers offered lower investment returns after the regulator made it a requirement for target-maturity bond funds to be linked with policies that only invest in bonds with ratings of “BBB” or higher. In addition, such bonds must not exceed 40% of the fund’s net value at most, so that the income of the fund linked to the insurance policy decreases, which affects the performance of investment insurance policies.

 

Source: Google | Insurance News

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