Wed, Oct 23, 2019 - Page 12 News List

Investment-linked products sales plunge in first half

By Kao Shih-ching  /  Staff reporter

Sales of investment-linked products floundered in the first half of the year, as insurers were hard put to offer good returns given volatile global financial markets and investors’ preference for traditional life insurance products, a Life Insurance Association report showed.

Demand for investment-linked products was robust last year, with first-year premiums hitting a record NT$503.3 billion (US$16.45 billion), the report said.

However, sales turned sluggish this year, with first-year premiums falling 23.44 percent from a year earlier to NT$208.5 billion in the first six months, it said.

As most investment-linked products are linked with offshore funds, they were vulnerable to fluctuations in exchange rates and global equities, reducing their attractiveness as investment vehicles, it said.

Senior citizens, who have deeper pockets than younger people, are ideally potential targets for investment-linked products, the report said.

First-year premiums from buyers older than 70 totaled NT$17.3 billion in the first six months of the year, accounting for 8.29 percent of the total, it said.

However, the Financial Supervisory Commission in November last year imposed stricter regulations on sales of investment-linked products to people older than 70, such as requiring sales agents to record or film the whole sales process, to avoid disputes, which could lead to a substantial decline in sales to this age group this year, the association said.

Investment-linked products denominated in New Taiwan dollars continued to make up the majority of products, with a market share of 58 percent, the report said.

US dollar-denominated insurance policies accounted for 65 percent of all foreign-currency investment-linked products, followed by yuan-denominated policies at 17 percent, South African rand-denominated policies at 12 percent and Australian dollar-denominated policies at 6 percent, the report said.

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