Despite insurance policy sales falling 37.7 percent annually in the first quarter, sales of spillover insurance products surged 342 percent to NT$297 million (US$9.87 million) as consumers focused on health insurance coverage amid the COVID-19 pandemic, the Financial Supervisory Commission (FSC) said on Tuesday.
Spillover insurance policies — named after the “spillover effect” that occurs when events in one sector affect events in another — spur consumers to improve their health in return for policy incentives such as premium cuts or bonuses.
More consumers have been attracted to spillover products, which allow them to increase coverage while lowering costs for lifestyle changes such as walking more or scheduling health examinations, Insurance Bureau Deputy Director-General Chang Yu-hui (張玉輝) said.
“The coronavirus outbreak seems to have made consumers more aware of their health coverage, which was one reason why the products continued to grow, while overall sales retreated due to stricter regulations and lower investment returns,” Chang added.
The FSC’s approval of four new products in the first quarter might also have helped increase sales of spillover policies, he said.
As of the end of last month, 33 spillover insurance products were being offered by eight life insurance companies, compared with 16 products from seven companies a year earlier, Chang said.
“Walker policies” — which give policyholders bonuses for implementing a walking regimen — continued to show the most rapid growth, with the number of new policies in the first quarter increasing 20 percent to 15,386 and first-year premiums increasing 7 percent to NT$249 million, commission data showed.
Nan Shan Life Insurance Co (南山人壽) joined Taiwan Life Insurance Co (台灣人壽), Cathay Life Insurance Co (國泰人壽), China Life Insurance Co (中國人壽), Shin Kong Life Insurance Co (新光人壽), Fubon Life Insurance Co (富邦人壽) and First Life Insurance Co (第一金人壽) in offering spillover insurance products, the data showed.
The number of walker policies in the first quarter increased to 20, up from nine a year earlier, it showed.
However, first-year premiums for policies with in-kind benefits fell 14 percent to NT$6.85 million, as one major offering — Cathay Life’s travel insurance with air ambulance service and reimbursement of medical expenses — became a victim of grounded airplanes amid the pandemic, the commission said.
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