Taiwan Insurance Report Q4 2011
Business Monitor International, October 2011, Pages: 83
The track record of Taiwan’s life insurers suggests that what is, by any standard, a massive and well-developed life segment may continue to grow over the medium term as a result of product development.
In the short term, though, the official discouragement of sales of interest-variable products, which had been seen as competitors to term deposits, has constrained growth. Both Cathay Life and Fubon Life reported that total premiums and first year premiums were significantly lower in H111 than they had been in H110. In coming months, we will almost certainly be revising down our projections for life penetration and premiums, for 2011 and subsequent years.
The life segment is reaching the end of a three-year period during which a number of foreign majors have – for various reasons – decided to reduce their commitment to the Taiwanese life segment or to sell out completely. Taiwan is a massive market, but it is one where the foreigners face massive competition from entrenched local titans such as Cathay Life, Fubon Life and Chunghwa Post.
Competitive pressures and regulatory decisions have constrained the non-life segment in the past. However, the latest reports from Cathay Century and Fubon Insurance indicate that premiums were again growing quite strongly in H111.
The absolute size, relative size, access to capital, brand and distribution networks of the massive Taiwanese financial services conglomerates – Cathay, Fubon and Shin Kong – which own the eponymous life companies (and Chunghwa Post, which is analogous to the Japan Post in Japan and La Poste in France) make them formidable competitors. Nevertheless, Allianz has succeeded in building in Taiwan a business that is larger, in terms of premiums written, of its combined (and not insubstantial) businesses in Central and Eastern Europe. Very unusual for a major Asia Pacific regional market, BNP Paribas Cardif appears to be the second largest foreign life company. However, one of the unusual features of Taiwan’s life insurance landscape is that, over the last three years, foreign companies have been selling or scaling down their businesses in Taiwan. In some instances – such as AIG’s protracted efforts to sell Nan Shan – the decision has been driven primarily by financial problems in other countries. Prudential Financial, Prudential plc, AEGON, MetLife and Manulife are all examples of companies that have very large businesses in other parts of the Asia Pacific, but which currently have a relatively small (or no) presence in Taiwan.
The much smaller, and more fragmented, non-life segment is dominated by property and casualty insurance operations of the Taiwanese financial conglomerates – and affiliates of Japanese property and casualty insurers. Multi-nationals such as Zurich and Chartis are present, but are relatively small. Aside from health insurance premiums written by life companies, which we have included in the non-life segment in order to ensure comparability of figures with other countries surveyed by BMI, most non-life lines had been contracting over the five years to the end of 2010. However, as noted above, the latest data from the largest local companies indicate that the segment was expanding again in H111.
Executive Summary
Table: Total Premiums, 2008-2015
Key Insights And Key Risks
SWOT Analysis
Taiwan Insurance Industry SWOT
Taiwan Political SWOT
Taiwan Economic SWOT
Taiwan Business Environment SWOT
Life Sector
Asia Pacific Life Sector Overview
Table: Asia Pacific Life Premiums, 2008-2015 (US$mn)
Taiwan Life Sector Update
Table: Breakdown Of Life Premiums, 2010
Life Industry Forecast Scenario
Table: Life Premiums, 2008-2015
Growth Drivers And Risk Management Projections
Population
Table: Insurance Key Drivers, Demographics 2008-2015
Non-Life Sector
Asia Pacific Non-Life Sector Overview
Table: Asia Pacific Non-life Premiums, 2008-2015
Taiwan Non-Life Sector Update
Table: Breakdown Of Non-Life Premiums, 2010
Non-Life Industry Forecast Scenario
Table: Non-Life Premiums, 2008-2015
Growth Drivers And Risk Management Projections
Macroeconomic Outlook
Table: Taiwan Economic Activity, 2008-2015
Political Stability Outlook
Table: Asia Pacific Regional Security Ratings
Healthcare
Healthcare Insurance
Epidemiology
Motor
Table: Insurance Key Drivers – Autos, 2008-2015
Insurance Risk/Reward Ratings
Table: Taiwan’s Insurance Risk/Reward Ratings
Table: Asia Pacific Insurance Risk/Reward Ratings
Competitive Landscape
Competitive Landscape Analysis
Major Players In Taiwan’s Insurance Sector
Table: Ranking Of Life Companies By Premiums, 2010 (TWDmn)
Table: Ranking Of Non-Life Companies By Premiums, 2010 (TWDmn)
Company Profiles
Local Company Profiles
Cathay Life Insurance
Fubon Life Insurance
MSIG Mingtai Insurance
Shin Kong Life Insurance
Regional Company Profiles
Ageas
AEGON
AIA Group Limited
Allianz
Aviva
AXA
BNP Paribas Cardif
Chartis
HDI-Gerling
HSBC Insurance
ING Group
Liberty Mutual
Manulife
MetLife ALICO
Prudential Financial
Prudential plc
QBE
RSA
Sun Life Financial
The Principal
Zurich Financial Services
BMI Methodology
Insurance Risk/Reward Ratings
Table: Insurance Risk/Reward Indicators And Rationale
Table: Weighting Of Indicators
- Cathay Life Insurance
- Fubon Life Insurance
- MSIG Mingtai Insurance
- Shin Kong Life Insurance
- Ageas
- AEGON
- AIA Group Limited
- Allianz
- Aviva
- AXA
- BNP Paribas Cardif
- Chartis
- HDI-Gerling
- HSBC Insurance
- ING Group
- Liberty Mutual
- Manulife
- MetLife ALICO
- Prudential Financial
- Prudential plc
- QBE
- RSA
- Sun Life Financial
- The Principal
- Zurich Financial Services
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