Taiwan remains a “blue ocean” with vast business opportunity for foreign life insurance companies to navigate, CARDIF Assurance Vie’s Taiwan branch said recently, after several peers sought to pull out of what they saw as a limited market.
The French insurer, whose parent BNP Paribas Group owns BNP Paribas Assurance TCB Life Insurance Co (合作金庫人壽) with the state-run Taiwan Cooperative Bank (合作金庫銀行), sees ample growth potential in bancassurance — the partnership with banks to sell insurance products through the lenders’ sales channel.
Bancassurnce has increasingly replaced sales agents in selling life insurance products.
It accounted for 65 percent of first-year premiums last year.
“We aim to deepen the bancassurance model in Taiwan by setting up a new culture, not just focus on the products alone,” country manager Ben Ng (黃旗興) said.
CARDIF Taiwan believes there is a huge uncontested market in this nation in terms of credit insurance that insurers and banks can explore jointly, Ng said.
Two weeks ago, New York-based MetLife Inc agreed to sell its Taiwanese unit to Chinatrust Financial Holding Co (中信金控) for US$180 million, citing growth constraints stemming from the lack of its own distribution channel.
MetLife’s exit, which still needs regulatory approval, came two months after American International Group Inc inked a deal to divest itself of its local unit, Nan Shan Life Insurance Co (南山人壽).
In October last year, MassMutual International Holdings MSC Inc, another US insurance firm, decided to sell its stake in MassMutual Mercuries Life Insurance Co (三商美邦人壽保險) to its Taiwanese partner for US$68.02 million.
One month earlier, British insurer Aviva PLC sought to end the joint venture with the state-run First Financial Holding Co (第一金控), but the Financial Supervisory Commission rejected the request.
CARDIF Taiwan has a positive view on Taiwan.
The insurer said only 7 percent of bank loans are insured, suggesting there was ample business opportunity for credit insurance products, said Jack Chang (張志杰), senior vice president at CARDIF Taiwan.
The insurer tops rivals in sales of mortgage life insurance policies and aims to raise its penetration rate from the current 15 percent to 40 percent within three years.
CARDIF Taiwan expects the forthcoming luxury tax to benefit the sales of unit-linked products, as “some idle funds will flow from real estate market to unit-linked insurance products,” Chang said
Unit-linked products may receive a further boost this year because a total of NT$800 billion (US$27.5 billion) worth of structured notes and interest-sensitive annuity insurance policies are due to mature, Chang said.
Peng Jin-lung (彭金隆), risk management and insurance professor at National Chengchi University, said bancassurance in Taiwan may see qualitative transformation after evolving into the mainstream sales channel in recent years.
“A healthy advancement entails long, serious commitment on both parts of insurers and their banking partners,” Peng said by telephone. “They must not assign too much importance to commissions, but focus on the needs of customers and develop products with sustainable benefits.”
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