Page 52 - Digital Edition SIRC Supplement

MARKET REPORT - TAIWAN

Non-life:
Realistic expectations

Taiwan’s non-life insurance market continues to log steady growth Mr Jack Tai Mr Chong-Tsang
for the fifth year running, in part due to economic and business Juang
growth, and the regulator’s efforts to build the country’s financial
industry into an Asian wealth management hub. We speak to Non-
Life Insurance Association of the R.O.C (NLIAROC) Chairman
Jack Tai and Central Re President Chong-Tsang Juang on their
assessment of the market in the past year.

By Dawn Sit

Between 2013 and 2014, Taiwan’s non-life insurance among businesses has heightened,” he said.
sector logged a 5.86% y-o-y growth in premium Mr Tai concurred, adding that policies for compulsory
income, bringing it to a total of TWD132.2 billion
(US$4.25 billion) in 2014. In terms of lines of business, automobile liability and other risks will help supplement the
almost all lines had seen an increase in premium income, growth.
with the exception of marine and engineering which saw a Increase in PA and health lines, whilst decline
decrease of 4% and 11% respectively. Motor insurance on the expected in fire
other hand, recorded the largest growth in premiums (8.9%). The NLIAROC, he added, has projected the growth rates of
Moderate growth expected, led by motor personal accident, health, and the rest of the casualty lines
Notwithstanding, when compared to the previous years since (which include liability, credit, engineering and miscellaneous
the market got back on the positive growth track in 2010, insurance) to be 8%, 12% and 6% respectively, or TWD34
last year’s growth has been the third highest (6.83% in 2011, billion accrued.
6.59% in 2012) recorded. The positive growth trend looks
set to continue in 2015 as first-quarter results have shown a Fire insurance however, is an exception as Mr Tai said
1.69% growth y-o-y. Likewise, both Mr Tai and Mr Juang are premiums for this line of business is estimated to decline in
expecting a “moderate” growth in premiums of 3-5% this year. the coming year.

Motor insurance seems poised to lead the growth. Mr Juang, While fire insurance premiums had increased about 30%
who expects the economy to achieve “moderate growth in between 2010 and 2014 as a result of the implementation of
2015”, said this will contribute to the “increase of car sales and 1) the “self-rating discipline” for commercial catastrophe
overall business activities”. “Combined with the upward trend insurance to restore rates to a reasonable level after 10 years of
in auto insurance pricing, we believe this will contribute to a intense competition in 2011, and 2) the rate-review mechanism
stable growth in premium income. Further, we anticipate an for non-CAT insurance in 2013, Mr Tai said: “However, this
increasing demand for liability insurance as legal consciousness premium growth has slowed down since May 2015 and has
even shown negative growth. Hence, we estimate fire insurance
premium income to decline by 5% in 2016.”

Non-life Insurance – Lines of Business (TWD million)

Year 2009 2010 2011 2012 2013 2014
Fire 22,697
Marine 18,705 17,365 19,050 22,223 21,896
Automobile 7,355
Aviation 7,637 8,484 8,773 8,445 7,657 70,197
Miscelleneous
50,276 52,658 55,826 59,653 64,454 811
Engineering 31,161
Liability 1,153 1,261 1,097 836 696 3,922
Credit 9,084
Accident 24,087 26,038 28,288 29,326 30,201 1,103
Health 14,026
Others 4,808 4,156 4,482 4,652 4,402 1,431
Total 1,595
Growth (%) 6,023 6,567 7,513 8,250 8,601 132,220

970 1,221 1,102 1,045 996 5.86

10,178 11,309 12,671 12,724 13,354

139 860 1,069 1,229 1,322

1,970 1,925 1,452 1,427 1,526

101,859 105,805 113,033 120,483 124,904

-5.46 3.87 6.83 6.59 3.67

50 SIRC Supplement • November 2015 • www.asiainsurancereview.com Back to Contents