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.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to