Bancassurance might play a less important role over the next few years, as banks’ advantages in marketing insurance policies would diminish with fewer people visiting traditional bank branches, National Chengchi University (NCCU) said in a report on Wednesday.
The bancassurance channel sold NT$333 million (US$11.56 million) in first-year premiums (FYP) in the first 10 months of this year, which accounted for 50.78 percent of all FYPs generated by life insurance policies, the report said, citing data compiled by the Life Insurance Association.
“The ratio, which hit a high of 65.65 percent in 2010, has been sliding from the peak over the past few years, as banks, which usually promoted the products to their clients face-to-face, found marketing more challenging, with fewer consumers using the branches,” said Peng Jin-lung (彭金隆), chairman of the university’s Department of Risk Management and Insurance.
The ratio is forecast to fall to below 50 percent by the end of this year, which would be the lowest in the past decade, Peng said.
That is because banks’ financial agents or customer relationship managers are more familiar with savings-type policies, and are more willing to sell the products due to higher commissions and simpler product design, but sales of savings-type policies have been curbed by regulations implemented this year, he said.
By comparison, although protection insurance policies — such as heath insurance products — have been growing, banks do not have much advantage selling them compared with salespeople from insurance companies due to limited time, he said.
“It takes more time to explain the complicated terms of health insurance policies and you have to be ready at any time to answer clients’ questions, as health insurance policies are more controversial,” Peng said.
“Bank agents cannot compete with insurance salesmen on that,” he said.
Bancassurance only registered a market share of 2.19 percent for health insurance policies last year.
In the next decade, bancassurance would still be a vital distribution channel for life insurance policies, but their importance would decline, Peng said, adding that banks should move toward digital services or to reconsider their wealth management strategy.
The Taiwan branch of BNP Paribas Cardif would work with its bank partners to develop a digital platform to enhance customer experience and the quality of bancassurance services, branch chief executive officer Christine Cheu (丘舒盈) told a news conference in Taipei on Wednesday, at which the report was released.
The company announced that it would continue to sponsor the next 10-year NCCU CARDIF Bancassurance Research Center program, pledging NT$20 million.
By sponsoring the center, the insurer hopes to understand how insurance firms and bancassurance channels can stay abreast of the new trends, and how to digitally transform and continue to grow bancassurance business, it said.
CHANGE OF FORTUNES: Concern over a pricey valuation and the risk of tighter US curbs on chip sales to China have poured cold water on TSMC’s bullish momentum Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares fell the most in three months yesterday upon trading resumption, joining a global technology rout as investors dramatically soured on the promises of artificial intelligence (AI). The shares declined 5.62 percent to close at NT$924 in Taipei, dragging down the benchmark TAIEX, which fell 3.29 percent to 22,119.21 points amid a technical correction, Taiwan Stock Exchange data showed. Other chip stocks also fell, with ASE Technology Holding Co (日月光投控) plunging 9.86 percent, MediaTek Inc (聯發科) dropping 2.35 percent, Realtek Semiconductor Corp (瑞昱) falling 1.33 percent and United Microelectronics Corp (聯電) retreating 1.17 percent, while Apple
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
South Korean battery maker LG Energy Solution Ltd is slowing construction of its third plant with General Motors Co (GM) in Michigan amid lackluster demand for electric vehicles (EVs) and worries about political change in the US. LG Energy is “adjusting the speed of overall investment” and “seeking ways for the flexible operation” of its plants, the company told Bloomberg News yesterday, but added that it does not mean the company is suspending construction. LG and General Motors started construction of the facility in 2022, pledging to spend about US$2.6 billion. Operations were supposed to begin in the first half of