Some Taiwanese life insurance companies have lowered the guaranteed interest rates for their New Taiwan dollar-denominated policies to comply with new accounting standards and regulatory measures.
While higher guaranteed rates mean higher returns for policyholders, they leave insurance companies vulnerable to foreign-exchange risks, as most of their investments are overseas, the Financial Supervisory Commission has said.
China Life Insurance Co (中國人壽) on Monday posted an announcement on its Web site that it would trim the guaranteed rates for five NT dollar-denominated policies from 2.7 percent to 2.6 percent.
The move came after Cathay Life Insurance Co (國泰人壽) announced on Saturday last week that it would reduce the rates by 10 basis points to 2.55 percent for eight of its NT dollar-denominated interest-sensitive insurance policies, and cut 11 basis points from another policy to 2.55 percent.
It is Cathay Life’s second rate cut for its NT dollar-denominated policies since April, but the latest cut was bigger, executive vice president Winnie Fan (范千惠) told the Taipei Times by telephone yesterday.
In a bid to comply with the International Financial Reporting Standards 17 (IFRS 17), which Taiwanese insurance companies have to adopt by 2025, a Cathay Life manager surnamed Au (歐) said the company needs to strengthen review of policy profitability to avoid selling products that will have a negative profit margin.
Given that 10-year Taiwan Treasury rates have been declining since the end of last year — which indicates that the rate of return on domestic investment is also falling — Cathay has decided to cut the guaranteed rates for its NT dollar-denominated products to maintain profitability, Au said.
“Those NT dollar policies would not necessarily report a negative profit margin if their guaranteed rates remain unchanged, given that the calculation method under IFRS 17 has not been finalized, but it is a safer choice for insurers,” Au said.
Cathay said it does not expect the rate cuts to scare away investors, as local banks’ savings interest rates are even lower.
Fubon Life Insurance Co (富邦人壽) earlier last week said it would lower its guaranteed rates for some policies in the second half of the year.
However, on Saturday last week it said that it would reduce the rates by 20 basis points to 2.5 percent for about 60 NT dollar-denominated insurance policies.
Most insurance companies are keeping the guaranteed interest rates for their US dollar-denominated policies unchanged for the time being, as they are still in the process of deciding if the return rates on overseas investment would go up or down amid uncertainties due to the US-China trade dispute.
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
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained