China Life Insurance Co (中國人壽) has the financial strength to meet the requirements set by the International Financial Reporting Standards 17 (IFRS 17), which are to take effect by 2025, the insurer’s parent company, China Development Financial Holding Corp (CDFHC, 中華開發金控), said yesterday.
Industry watchers have said that the new accounting standards might have a negative effect on local insurers, as they have stricter requirements on how the companies book their profits, define revenues and calculate liabilities.
While many insurance firms have said that the new rules are a major concern for development, CDFHC president Alan Wang (王銘陽) said the company’s preliminary calculations showed that China Life would be able to cope with the standards and would not need to set aside more reserves.
“IFRS 17 is not that dreadful. I think the local market and investors have overreacted,” Wang told reporters on the sidelines of an investor conference in Taipei.
With a cash injection of NT$9.27 billion (US$31.17 million) in June, China Life has become more resilient amid volatility in the global financial market, Wang said.
The insurer’s risk-based capital ratio rose to 319 percent at the end of June, from 272 percent at the end of last year, he said.
China Life has adjusted its marketing strategy to boost profitability and long-term revenue growth, vice chairwoman Kuo Yu-ling (郭瑜玲) said.
“We have discontinued some single-premium life insurance policies since the beginning of this year, as they are less profitable than the traditional multiple-term life insurance policies,” Kuo said.
That was a tough call, as Taiwanese investors favor single-premium policies, which usually provide higher returns, while the company’s sales partners had difficulty getting used to the transformation, she said.
The insurer’s first-year premiums (FYP) for the first nine months of this year fell 2.4 percent year-on-year to NT$108.6 billion due to the change, Kuo said.
The wealth management business in CDFHC’s banking unit, KGI Bank (凱基銀行), was also affected as a result, as its customers who used to purchase polices did not react well to the change, Wang said.
However, the transformation paid off, as profitability rose on increased sales of multiple-term life insurance policies, which generated NT$40.9 billion in FYP for the first nine months, up 50.36 percent from a year earlier, Kuo said.
China Life would continue to concentrate on multiple-term life insurance products, she added.
Net profit in the first three quarters rose 23 percent from a year earlier to NT$12.95 billion, with earnings per share (EPS) of NT$3.1, the insurer said.
That helped CDFHC boost net profit 26 percent annually to NT$10.69 billion over the same period, with EPS of NT$0.73, the company said.
SUPPLY CHAIN RESHUFFLE: The chipmaker was ‘cautious’ in not making commitments too early in building production in the US, citing ‘geopolitical factors,’ Nikkei Asia said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is considering building an advanced IC packaging plant in the US following a massive investment to set up a wafer fab in Arizona, Nikkei Asia reported. TSMC was considering the plant in response to “Washington’s desire to bring more of the tech supply chain onto home turf,” the report said. TSMC increasingly faces the need to expand in the US, which accounts for about 62 percent of its total sales, Nikkei Asia said, citing three sources who declined to be named. The potential US plant would be equipped with the latest 3D stacking technologies to arrange chips
MARKET BOOST: Elon Musk said Tesla would resume bitcoin transactions once there is ‘reasonable’ clean energy usage by miners and denied selling a big part of his holdings Bitcoin yesterday hit a two-week peak just shy of US$40,000, after another weekend reacting to tweets from Tesla Inc chief executive Elon Musk, who fended off criticism over his market influence and said Tesla sold bitcoin, but might resume transactions using it. Bitcoin has gyrated to Musk’s views for months since Tesla announced a US$1.5 billion bitcoin purchase in February and said it would take the cryptocurrency in payment. He later said the electric vehicle maker would not accept bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change. “When there’s confirmation of reasonable
As much as the US pines for the good old days of global semiconductor supremacy, Japan feels its loss of glory even more. Once a dominant name in electronic components, the nation has been overtaken by Taiwan, South Korea, and, more recently, China. Yet Tokyo might have a viable plan to revitalize its domestic sector. “Unlike the purely domestic, independent way it was done in the past, I think we need to cooperate with overseas counterparts,” Akira Amari, a former economy minister and senior member of the ruling Liberal Democratic Party, told Bloomberg News’ Isabel Reynolds and Emi Nobuhiro this week. That is
Apple Inc has hired Ulrich Kranz, a former senior executive at BMW AG’s electric vehicle (EV) division, to help lead its own vehicle efforts, people familiar with the situation said. The tech giant hired Kranz in recent weeks, about a month after he stepped down as CEO of Canoo Inc, a developer of self-driving EVs. Before cofounding Canoo, Kranz was senior vice president of the group that developed the i3 and i8 cars at BMW, where he worked for 30 years. Kranz is one of Apple’s most significant automotive hires, a clear sign that the iPhone maker is determined to build a