Taiwan: Life insurance premiums continue to contract in 2021 – Asia Insurance Review

Taiwan: Life insurance premiums continue to contract in 2021 - Asia Insurance Review

Taiwan’s overall life insurance premium volume continued to decline last year, according to statistics from the Life Insurance Association.

The reason for this is that in addition to continuing to be affected by the COVID-19 pandemic and related prevention measures, life insurance business was affected by low interest rates.

The statistics show that the total premium income of the life insurance industry reached NT$2,648.5bn (95.3bn), a year-on-year decrease of 12.5%. While first-year premiums declined at a slower pace of 6.7% to NT$731.5bn, renewal premiums plunged by 14.5% to NT$1,92bn compared to 2020.

The statistics also showed that traditional life insurance business performed less well than investment-related life insurance products.

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












Type



2021


Premium


NT$m



2020


Premiums 


NT$m



2021/2020


Change %



2020/2019


Change %





 


First-year



Traditional



470,586



576,590



-18.4



-32.9





Investment related



260,940



207,122



26.0



-13.7





Subtotal



731,525



783,712



-6.7



-28.7





 


Renewal

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Traditional



1,838,234



2,162,242



-15.0



+2.7





Investment related



78,724



79,411



-0.9



-1.2





Subtotal



1,916,958



2,241.653



-14.5



+2.5





 


Total



Traditional



2,308,820



2,738,832



-15.7



-7.6





Investment related



339,664



286,533



18.5



-10.5





Total



2,648,484



3,285,461



-12.5



-7.9




Source: Life Insurance Association, Taiwan

The first-year premium income from investment-related life insurance products contributed 35.7% of total first-year premiums in 2021, compared to 26.4% in 2020.

The improved performance of investment-related life insurance products last year is attributed to a stronger New Taiwan dollar against the US dollar and the bullish capital market in the first half of the year.

Profits

Separately, statistics released by the Financial Supervisory Commission (FSC), the life insurance sector in Taiwan reported an 88.5% surge in pre-tax profits to NT$388.5bn in 2021 compared to 2020.