Five Taiwanese life insurers have cut the declared interest rates for their interest-sensitive New Taiwan dollar and US dollar products in a bid to reduce operating risks.
Cathay Life Insurance Co (國泰人壽) on Sunday announced on its Web site that it would lower the declared rates for dozens of its US dollar-denominated policies from last month’s 3.55 percent to 3.2 percent or 3.15 percent.
The insurance company is also lowering the rates of some of its NT dollar-denominated policies from 2.5 percent to 2.25 percent, it said.
Fubon Life Insurance Co (富邦人壽) has trimmed the rates for its US dollar policies from 3.5 percent to 3.25 percent and cut rates for its NT dollar policies from 2.5 percent to 2.3 percent.
Fubon Life’s declared rates in January were as high as 3.7 percent for US dollar products and 2.96 percent for NT dollar products, company data showed.
Transglobe Life Insurance Co (全球人壽) and China Life Insurance Co (中國人壽) lowered the rates for their US dollar products from 3.73 percent to 3.7 percent and 3.41 percent to 3.3 percent respectively, according to their Web sites.
Transglobe and China Life also lowered the rates for their NT dollar products from 2.55 percent to 2.35 percent and 2.5 percent to 2.3 percent respectively, their Web sites showed.
Nan Shan Life Insurance Co (南山人壽) has kept the rates for most of its US dollar policies unchanged, but decreased the rates for its NT dollar products from 2.5 percent to 2.3 percent, the company said yesterday.
Insurance companies in Taiwan began to lower the declared interest rates for their products in March, after the Insurance Bureau warned in January that setting unrealistically high declared rates could pose a risk to their businesses.
While higher declared rates mean higher bonuses for policyholders, they leave insurance companies vulnerable to foreign-exchange risks, as most of their investments target overseas assets, the regulator said.
“We will not tell insurers how low the declared rates should be, as only companies know what investment returns are best for their investment portfolios, but we have since the beginning of this year been asking them to stop selling products that are not profitable,” a Financial Supervisory Commission official surnamed Tsai (蔡) said by telephone.
The commission does not want to see insurers promise good declared interest rates just to poach clients, he added.
Although insurers’ rates cuts might be unwelcome for policyholders, consumers are not likely in the short term to switch and invest in policies from other insurers that have left their rates unchanged, said Peng Jin-lung (彭金隆), chairman of National Chengchi University’s department of risk management and insurance.
“People who have the funds and plan to make investments will still prefer insurance policies, which offer higher returns than bank deposits,” Peng said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure