Taipei Times: When will Transglobe Life Insurance Co (全球人壽) integrate Kuo Hua Life Insurance Co (國華人壽)?
James Liu (劉先覺): We aim to integrate Kuo Hua’s assets and liabilities, including its employees, in the first quarter of next year. The integration is positive for the sector and society as a whole after the Financial Supervisory Commission put Kuo Hua under the receivership of the Taiwan Insurance Guaranty Fund (保險安定基金) in August 2009.
There won’t be a name change and Kuo Hua will become an empty legal entity afterward. After the integration, Transglobe will strive to become one of the top six insurers by accounts of first year premiums next year. A top-five ranking may be overambitious.
Kuo Hua has been a good insurance company in light of its information technology, administrative abilities and sales performance. First year premiums amounted to NT$5 billion [US$172.1 million] for the first nine months, despite the unfavorable operating environment. Transglobe will seek to maximize synergy benefits — the real challenge following the integration.
TT: Is it true that Transglobe intends to retain 50 percent of Kuo Hua employees, both in-office workers and sales agents?
Liu: We will have to discuss the matter with Kuo Hua’s receiver, the Taiwan Insurance Guaranty Fund.
The fund has drawn up a plan detailing how buyers should handle Kuo Hua’s 2,700 employees after conferring with the workers’ union. All bidders understood and accepted the arrangements before joining the auction last month. It is not convenient for me to reveal the details before the dust settles.
Transglobe knows how to integrate product lines, employees and operations as the company has become experienced in mergers and acquisitions since entering the local market in 1994.
In the past 18 years, we acquired American Family Life Assurance Co (美國家庭人壽保險), Transamerica Life Insurance Co (全美人壽), AXA Life Insurance Co (安盛國衛) and Aegon Life Insurance (Taiwan).
TT: How will Transglobe use the record compensation and become profitable after acquiring Kuo Hua?
Liu: We will use the fund to prop up Kuo Hua’s financial health and maintain the rights and benefits of 2 million existing policies.
We intend to use the funds over two to three years as the company’s investment officials see fit. There is no urgency or a timetable to allocate the funds.
On principle, Transglobe allocates 85 percent of its investment funds to fixed income assets, mainly US bonds, since they are less risky. Currently, foreign investments take up 40 percent of our assets under management. We invest the remaining 15 percent in equities and real estate properties. Stock investments account for 5 percent of our portfolio.
We expect to turn a profit the first year after the acquisition is completed. It is not an unrealistic challenge based on our knowledge of the company’s financial state.
However, it is premature for such talk. The macro-environment, especially interest rates, has much to do with insurers’ profitability. There seems to be a small ray of hope that global central banks will start to reverse monetary policy next year as the world’s economy is gradually emerging from a slowdown.
TT: Will Transglobe adjust its business strategy after the integration?
Liu: Transglobe prides itself as being a pension-planning expert and will continue to emphasize long-term insurance policies through multi-sales channels: namely sales agents, bancassurance and insurance brokerage. Kuo Hua’s sales operations will assume an important role at Transglobe in the future.
I don’t see a need for change at present, but no business strategy remains unchanged forever. We will make adjustments when situations call for them.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts