Nan Shan Life Insurance Co (南山人壽) on Wednesday reported that sales of spillover insurance policies for the first seven months of the year hit NT$1.3 billion (US$46.53 million), easily surpassing sales of NT$560 million for the whole of last year, as demand for health coverage rose amid a local COVID-19 level 3 alert.
Sales of spillover insurance picked up sharply in May, when the number of local infections surged and people became more conscious about health insurance coverage, Nan Shan said in a statement.
“Younger consumers are more receptive to spillover insurance, with up to 70 percent of policyholders younger than 40 and half of them younger than 30,” the statement said.
A greater number of policyholders are female, it added.
The lower premiums of spillover insurance products compared with other health insurance policies also attracted younger consumers, Nan Shan said, adding that most policyholders look at spillover insurance products to develop a healthier lifestyle.
For example, the company’s products would not reward consumers with cash back, discounts in premiums or increase in coverage if policyholders do not have normal or satisfactory results from routine physical examinations, Nan Shan said.
The company sold 16 types of spillover insurance products to more than 190,000 policyholders. The most popular one, which has more than 100,000 policyholders, offers coverage against infectious diseases and compensation if the policyholder is hospitalized for medical treatment.
First-year premiums (FYPs) from spillover insurance products contributed 30 percent to overall premiums from accident and health insurance products, it said.
Separately, Shin Kong Life Insurance Co’s (新光人壽) FYPs fell 49.7 percent year-on-year to NT$21.9 billion in the first six months of the year, as the company focused on selling higher-margin products, it told an investors’ conference on Tuesday.
Over the period, FYPs generated from traditional insurance policies dropped 55.5 percent year-on-year to NT$17.3 billion, while those derived from investment-linked policies surged 280 percent to NT$1.9 billion, company data showed.
Shin Kong said it remains focused on selling insurance products denominated in foreign currencies and continues to invest in overseas targets to gain higher returns.
FYPs of foreign-currency policies totaled NT$16.87 billion and accounted for 77 percent of its overall FYPs in the first six months, up from 74 percent a year earlier, data showed.
The company registered a pre-hedge recurring yield of 3.08 percent, down from 3.65 percent last year, but its after-hedge investment return rate rose to 3.84 percent from 3.69 percent over the same period due to lower hedging costs, it said.
Its overall investment grew 6.6 percent annually to NT$3.2 trillion, with investment in foreign bonds accounting for 62.6 percent, followed by 11.2 percent for local bonds, 7.5 percent for local stocks and 6.8 percent for real estate, it added.
Affiliate Shin Kong Commercial Bank (新光銀行) reported an annual growth of 5.5 percent in lending to NT$689.3 billion in the first half of the year due to increases in mortgage and consumer loans, which pushed its net interest income up by 9.9 percent to NT$6.1 billion, the bank said on Tuesday.
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