The insurance premium decline in Taiwan is expected to moderate in the next 12 to 18 months due to an already low base.
The sector has faced a years-long decline from its 2019 level, while premiums plunged by 21% last year due to the current economic conditions and lower sales of savings product, according to a report from Fitch.
New business from foreign currency policies also saw a decline due to the US dollar’s appreciation, leading to higher policy prices. That said, health insurance saw a bit of leeway thanks to the nation’s rapidly ageing population, which led to better awareness of health risks and needs.
A separate study from GlobalData is projecting a decent comeback in store for the Taiwan insurance sector in 2024, powered by improving global macro-economic situations, increased interest rates, as well as positive regulatory developments. However, the report did note that it is still set for further decline later in the year due to several factors, most exemplary of which is the prolonged period of low interest rates.
Adding still to its problems is the additional risk exposure resulting from the current geopolitical situation between Taiwan and China. Lloyd’s and its associated carriers have already started to cut down on their cover for the island as several scenarios outlined possibly uninsurable risks, calling back to the industry’s high alert with regards to the Russian invasion of Ukraine.
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