Tue, Mar 06, 2018 - Page 12 News List

Fubon Life upbeat about gross premium increase

By Crystal Hsu  /  Staff reporter

Fubon Life Insurance Co (富邦人壽) is optimistic about increasing its gross written premiums this year, encouraged by interest rate hikes in the US that may boost sales for US dollar investment-linked policies.

Gross written premiums at the life insurance unit of Fubon Financial Holding Co (富邦金控) grew 4.4 percent last year to NT$515.4 billion (US$17.6 billion) as a stable global economy benefited investment appetite, although foreign exchange volatility eroded some gains, company data showed.

Net income totaled NT$32.32 billion, an increase of 12.7 percent, with earnings per share of NT$3.9.

“The global landscape outlook is fair, while the likelihood of surprises for the local currency’s movement is subsiding,” Fubon Life president Benson Chen (陳俊伴) said.

The New Taiwan dollar appreciated 8.14 percent last year, eroding local insurers’ partial profits, but equity gains across global bourses more than likely offset the pains, analysts said.

Fubon Life is better prepared this year to hedge its currency-related risks, Chen said.

Investment-linked policies denominated in the US greenback might gain more popularity this year after turning into a mainstream product last year, company vice president Fred Liao (廖運宏) said.

Interest rate hikes last year by the US Federal Reserve allowed such products to generate yields of about 3.5 percent, compared with 2 percent for similar products denominated in New Taiwan dollars, Liao said.

The Fed has indicated there will likely be three rate hikes this year, but analysts have forecast faster adjustments as inflation expectations flare.

Fubon Life refrains from offering policies linked to target-date funds even though its peers have seen strong sales for such products, Liao said.

“Customers of such products are not fully aware of the risks involved,” Liao said, adding that 40 percent of their underlying assets are non-investment-grade debts.

Fubon Life plans to hire 6,000 more sales agents this year, Chen said, adding that the average age of the company’s sales agents is 29.8.

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