Fri, Jul 17, 2009 - Page 12 News List

Net worth of local life insurers drops dramatically

By Crystal Hsu  /  STAFF REPORTER

Taiwanese life insurers saw their net worth plunge last year, the Financial Supervisory Commission (FSC) said yesterday.

Wu Tsung-chuan (吳崇權) of the FSC’s Insurance Bureau said the net worth of life insurers contracted from NT$430 billion (US$13 billion) in 2007 to NT$70 billion.

Premiums for local insurers had dropped in the low interest rate environment between 2003 and 2006.

Insurers saw the trend reverse in 2007 with the introduction of investment-linked policies, Pan Po-tseng (潘柏錚), president of Shin Kong Life Insurance Co (新光人壽), said yesterday.

Still, weak capitalization has continued to challenge the systemic stability in this sector, Fitch Ratings said last week.

The FSC recently announced measures including temporarily easing capital ratio requirements to help ease financial pressure. The measure is due to expire at the end of the year and the FSC will need time to consider whether or not to extend it, Wu said.

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