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.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS