Prudential Life Insurance Company of Taiwan (保德信人壽), the local unit of US-based Prudential Financial Inc, is aiming to grow its premiums and profit this year despite by a high comparison base last year and continued low interest rates, chief executive James Lan (藍振富) said yesterday.
“Higher policy costs will have a very limited impact on the firm because we focus on protection and medical insurance policies with installment payment schemes,” Lan said.
Sales of lump-sum life insurance policies are expected to drop sharply this year after the Financial Supervisory Commission cut assumed interest rates twice last year to reflect lower funding costs.
Unlike other foreign insurers that tend to underscore investment-linked products, Prudential is tapping into business opportunities resulting from the nation’s fast-aging population and intends to expand its operations in central and southern Taiwan, Lan said.
The company, which employs more than 800 sales agents, is looking to acquire office space in Greater Taichung and Greater Kaohsiung, Lan said, adding that the investment plan will not violate the commission’s purchase ban because the properties at issue are intended for self-occupancy, instead of generating rental yields.
Unlike other insurers, the firm has put the bulk of its funds in local government bonds rather than asset allocations.
Under the commission’s rules, life insurers’ commercial rental properties must generate yields of 2.875 percent because investments in such sites are blamed for boosting property prices, particularly in the Taipei area.
Lan said he expected the firm’s business model to be successful given the nation’s demographics.
With official data showing people aged 15 and younger falling by 1.34 million over the past decade, and with married couples down 13.4 percent, demand for pension planning and medical insurance is likely to grow, executive vice president Chao Mei-ying (楊美瑛) said.