Taiwan's high savings rate and its aging population make it an attractive market for insurance and pension fund investment products, an Aviva executive said yesterday.
The short-term prospect might not look so rosy given some worries about the economy, but the potential for long-term development is strong, said Christopher Knight, chief executive officer of Aviva Taiwan, during a press briefing yesterday.
The insurer's strong confidence comes from the fact that local awareness of saving and planning for retirement financing is widespread in Taiwan, he said.
BIG SAVERS
In a global survey of consumer attitudes toward savings that Aviva conducted early this year, 81 percent of Taiwanese said they prefer saving to spending money, the highest among the 24 nations polled.
More than 27,000 people were interviewed for the survey in China, Singapore, the UK, Spain, the US, Canada and several other countries.
In addition, 53 percent of Taiwanese regularly set aside money for retirement, a number higher than the global average of 44 percent and the UK's 36 percent, the report showed.
Taiwanese believe that the best way to plan for retirement is to make investments or savings on a monthly basis -- with 47 percent of Taiwanese respondents saying so -- compared with the real estate investments or inheritances cited by European respondents.
However, more than 80 percent of Taiwanese still prefer short-term savings of under 10 years to maintain liquidity, said Vanessa Tan (
This preference gives insurers a big challenge in terms of promoting long-term retirement products, Tan said.
Reiterating Aviva Taiwan's commitment to the local market, Knight said his firm will design a wide variety of products to meet the needs of consumers from all walks of life, rather than just focusing on well-heeled clients as most bancassurance counterparts have done.
To further develop its bancassurance business, Aviva Taiwan has inked a joint venture deal with the state-controlled First Financial Holding Co (
With paid-in capital of NT$2.25 billion (US$67.6 million) in the first stage, First Financial controls 51 percent and has the right to appoint the new insurer's chairman, while Aviva takes the remainder with Knight serving as its president.
AWAITING APPROVAL
First Aviva Life Insurance will start operations soon after it obtains regulatory approval from the Financial Supervisory Commission and the Ministry of Economic Affairs, Knight said.
But the new partnership might face uncertainties as First Financial is rumored to be an ideal target for merger under the government's second-stage financial reform program.
Asked whether he was worried about the new entity's future, Knight said Aviva had factored that possibility of a First Financial merger into its planning.
"Mergers and acquisitions happen in the world all the time," Knight said. "Maybe it will become a bigger opportunity for us if First Financial really merges with another."
"This is a marriage. Whatever happens in the future, we'll make sure it's a fair outcome," he said.
Aviva Plc is the UK's largest life insurer and the world's fifth-largest insurance group.
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