Taiwan’s insurance industry is likely to see their assets grow next year amid a stable economy at home and continued normalization of monetary policy abroad, KPMG Taiwan said in an annual report released yesterday.
The sector’s collective profit exceeded NT$300 billion (US$9.24 billion) in the first eight months, already higher than the whole of last year, the consultancy firm said, citing data from the Financial Supervisory Commission.
The improvement came after global economic conditions and financial markets turn favorable this year, compared with last year, KPMG analyst Joyce Tsai (蔡珮汝) said, as major central banks cut interest rates after inflationary pressures mitigated.
Photo: Taipei Times
Monetary tightening hurt the value of bond holdings and prompted corporate and retail investors to hold onto cash, ominous for sales of insurance policy and wealth management as a whole.
The economic scenes look stable moving forward, as the US Federal Reserve would further lower interest rates like peers in Europe and elsewhere, in the absence of major surprises, KPMG said.
The backdrop is positive for the sector to augment its assets, which picked up 3.8 percent last year to NT$35.38 trillion, it said.
The volume accounted for 33.72 percent of the assets for the entire financial industry, slowing from 34.17 percent one year earlier, as insurers have not fully emerged from global monetary tightening and structural changes.
Taiwan notched 14th last year in premium rankings, down from 11th place one year earlier, with its market share falling from 1.28 percent to 1.09 percent on the world stage, the report pointed out.
At the same time, insurance penetration dropped from 11.4 percent to 10.3 percent of the nation’s GDP, sliding from fifth to sixth globally and behind Hong Kong and South Korea in the region, it said.
Taiwan retained the world’s leading position for 13 years by measure of insurance penetration until 2020 when low interest rates and regulatory restrictions regarding bond holdings dampened the appeal of unit-linked insurance policies, formerly a popular investment tool among Taiwanese, analysts said.
Taiwan’s super-aging society poses a challenge and presents an opportunity for insurance players, another KPMG analyst Michael Lien (連宏銘) said.
The world population is aging, but the phenomenon is more poignant in Taiwan where the proportion of people aged 65 and older is expected to hit 20 percent next year, Lien said.
The demographic trend is unfavorable for doing business generally but suggests need for life planning and risk management, Lien said.
The insurance industry could develop financial products to help people cope with the evident and inevitable needs, Lien said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary