Life insurance companies are under pressure to raise capital because of the recent appreciation of the NT dollar, but Fubon Life Assurance Co (富邦人壽) will see limited impact, given its better-than-expected currency hedging capabilities, analysts said yesterday.
"[Fubon Life] still has sufficient capital, it's [doing] okay," said an analyst, who requested anonymity.
The analyst's remark came after news that Fubon Life plans a capital raise this year to comply with the financial regulator's new subprime accounting rule.
The insurer, a subsidiary under Fubon Financial Holding Co (富邦金控), may raise capital of between NT$3 billion and NT$4 billion to keep its risk-based capital (RBC) ratio between 250 percent and 300 percent as required by the regulator, Fubon Financial president Victor Kung (龔天行) said on Saturday. RBC is a measure of a company's financial strength.
By keeping a more than 250 percent RBC ratio, Fubon Life will be able to apply for approval from the regulator to increase its overseas investments from 35 percent of its capital to 40 percent.
Kung did not say how much the company's losses from subprime-related investments and foreign exchanges had lowered its RBC ratio, which still leveled at 290 percent late last year.
But he added that losses from subprime-related investments and a strengthening NT dollar would weigh heavily on most local life insurers' profits this year.
Dexter Hsu (許世德), a Taiwan equity research analyst at JPMorgan Chase, agreed, expressing a negative view toward the local life insurance sector's outlook.
"Most life insurers need to raise capital. It's a matter of time," Hsu said yesterday, adding that JPMorgan is the first foreign investment bank to have a negative rating on the performance of life insurers this year.
Shin Kong Life Insurance Co (新光人壽) reportedly plans to raise NT$10 billion this year, while Taiwan Life Insurance Co (台灣人壽) is evaluating the situation. Meanwhile, Cathay Life Insurance Co (國泰人壽) has no plans to raise capital.
Aside from losses from subprime-related investments and currency exchanges, most life insurers are likely to report worse-than-expected performance in the first quarter because of past sales of low-margin products, he said.
Another analyst said he expected the US dollar to ease its downward trend, which would likely boost domestic life insurers.
"We expect the US dollar to soon bottom out and strengthen against the euro and Japanese yen," said Mike Chow (周道中), a senior manager with Yuanta Securities Corp (元大證券).
With a rebounding greenback, the NT dollar, whose recent gains were boosted by foreign capital inflows, is unlikely to gain further before May 20 when president-elect Ma Ying-jeou (
The NT dollar has gained nearly 7 percent since the start of the year to trade at NT$30.402 against its US counterpart on Friday.
Chow also expressed confidence in the future performance of Fubon Financial, which will soon be the first Taiwanese bank to branch into China via its Hong Kong banking subsidiary.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS