Mercuries Life Insurance Co (三商美邦人壽保險) is looking to achieve gross premiums of more than NT$100 billion (US$3.3 billion) this year and raise its total assets above NT$1 trillion in five years, senior executives said yesterday.
The outlook is somewhat conservative considering the NT$2.45 billion net income the insurer posted last year, which was 59.4 percent up from the previous year.
“It is difficult to achieve an equally aggressive showing [in terms of profitability] this year as the stop-sale effect fades away and insurance policies become more expensive,” Mercuries Life chief financial officer Winston Yang (楊棋材) said.
Yang attributed this to the Financial Supervisory Commission lowering assumed interest rates, limiting the yield leeway for insurance policies.
Mercuries Life is seeking to keep first-year premiums unchanged this year from last year and improve its financial proficiency by raising the contribution of recurring income to the company’s break-even point, or yielding an interest rate of 3 percent, Yang said.
Currently, recurring income accounts for 80 percent of the company’s net investment income, yielding an average interest rate of 2.9 percent, he said.
The US tapering of its quantitative easing (QE) is good for the sector’s business operating environment in the long run, but may weigh on bond prices in the short term, communications official Kao Chih-chiang (高志強) said.
Taiwan’s sixth-largest insurer by assets is determined to increase its asset size from NT$700 billion at present to above NT$1 trillion in five years, chief executive officer Roy Meng (孟嘉仁) said.
A member of Mercuries & Associates Ltd (三商行), which owns 1,000 restaurants, grocery shops, shoe stores and other businesses, the insurer is to set up a marketing office this year to integrate 800,000 customers and improve sales channels, Meng said.
Mercuries Life has no interest in joining a financial holding company, though it is supportive of consolidation among the nation’s financial institutions, Meng said.
The company plans to increase its sales staff from 15,000 to 16,000 this year to deepen its presence in the domestic market, Meng said.
Shares in Mercuries Life rose 0.51 percent to NT$19.7 yesterday in Taipei trading, more than the TAIEX’s 0.07 percent rise, Taiwan Stock Exchange data showed.