A new measure allowing life insurance policies to be converted into other types of insurance policies took effect yesterday, which should benefit both policyholders and insurance companies, especially Cathay Life Insurance (國泰人壽) and Shin Kong Life Insurance Company (新光人壽), the government and analysts said.
The new measure enables policyholders to convert life insurance policies into annuity, medical and long-term care insurance policies the Financial Supervisory Commission said.
The commission said on Thursday that the policy conversion would also allow policyholders to receive benefits while alive. For example, once life insurance policyholders changed over their contracts to health insurance, the insurers would pay them when they suffered disease or injury.
Moreover, as people aged 50 and older typically face difficulties in subscribing to new medical and long-term care insurance policies, the new measure looks attractive, according to UBS Securities analyst Kelvin Chu (朱曉暐).
The Life Insurance Association of the ROC (人壽保險公會) also believes that in an aging society like Taiwan, such conversions would benefit elderly policyholders.
However, to safeguard the rights of policyholders, the commission requires a three-year “cooling-off” period that allows policyholders to revert to their original policies if they wish, unless they take a payout during that three-year period.
Life insurers are not allowed to solicit the insured to make any conversion through inappropriate marketing campaigns, with offenders subject to a fine ranging between NT$600,000 and NT$3 million (US$100,500), the commission said.
For life insurance companies, the new measure would also help them better manage their outstanding “Legacy policies” and thus narrow the negative interest spread arising from signing high-guaranteed rate policies in the past, Chu said. Legacy policies refer to those with a guaranteed policy return of 4 percent or above.
Chu said her analysis suggests that every 10 percent conversion could reduce Taiwanese insurers’ cost of liability by between 6 and 21 basis points, while leading to an earnings accretion of from 5 to 30 percent for the major players.
Cathay Life and Shin Kong Life, could see from 14 to 30 percent increase in earnings in the long term, on the premise of a 10 percent conversion in legacy policies, she said.
However, Cathay Life executive vice president Lin Chao-ting (林昭廷) said yesterday that it is hard to gauge the impact of the policy conversion for the time being.
“We welcome and will support the policy though it may bring longevity and mortality risks,” Lin said at the company's quarterly meeting with investors in Taipei.
Analysts said it is estimated that at least 4 million life insurance policies — worth more than NT$1 trillion in the local market — are eligible for the changes.
Additional reporting by Crystal Hsu and CNA
This story has been updated since it was first published.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the