Sat, Feb 22, 2014 - Page 14 News List

Allianz seeks premium increase of 7.7%: CEO

PREMIUM PIVOT:The local branch of the German insurance firm sees significant growth potential in protection-type policies for rapidly aging Taiwanese

By Crystal Hsu  /  Staff reporter

Allianz Taiwan Life Insurance Co (安聯人壽) aims to increase overall premiums by 7.7 percent this year from last year driven mainly by unit-linked insurance products, as financial regulators frown on sales of quasi-savings policies, chief executive Danny Lam (林順才) said yesterday.

While eager to increase protection-type products to balance its source of income, the local unit of the German insurer is cautious about offering traditional insurance policies based on yuan on concerns over market acceptance, Lam said.

Gross written premiums totaled NT$65 billion (US$2.14 billion) last year, up 34 percent from a year earlier and earning Allianz Taiwan ninth place among peers with a 2.7 percent market share, Lam said.

“We aim to raise gross premiums to NT$70 billion this year on a brighter landscape for sales of investment-linked policies,” Lam said, adding that such products accounted for 95 percent of the company’s product mix last year.

In other words, protection-type policies made up just 5 percent, suggesting ample growth given Taiwan’s fast-aging population.

Senior citizens are expected to constitute 14 percent of the population in 2017 after passing 7 percent in 1993, qualifying Taiwan as an aging society, said Chang Chieh-wen (張傑文), a psychiatrist at Cardinal Tien Hospital.

The ratio may rise to 20 percent in 2025, making Taiwan a super-aged society, and climbing to 45.6 percent in 2060 with an aged population of 7.84 million, Chang said, citing official statistics.

Accordingly, Allianz Taiwan plans to raise the share of protection-type insurance policies to 20 percent to 30 percent in the coming seven years to diversify the company’s source of income and meet customer needs, Lam said.

Toward that end, the insurer is to enlarge its number of sales agents from the current 1,200 to 1,300 by the end of this year, while deepening partnership with local banks, he said.

Bancassurance contributed 70 percent of first-year premiums last year, higher than 60 percent for the sector, Allianz Taiwan senior vice president Tom Yang (楊承清).

Lam and Yang agreed that a yuan-based traditional insurance policy may prove limited in terms of popularity since Taiwanese can only own yuan-time deposits bearing interest rates of up to 3 percent.

The growing acceptance of yuan deposits may take a toll on investment products that offer similar yields, but carry higher risks, Yang said, adding that the lack of channels poses another concern against offering the policies.

As of last year, Allianz Taiwan has overall assets valued at NT$200 billion, with the bulk of its investment fund parked in local government bonds and 30 percent in debts and other investment tools overseas, Lam said.

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