First-year premiums of foreign-currency insurance policies plunged 53 percent to NT$24.2 billion (US$801.1 million) as of the end of October, marking the largest drop for a single month this year, the Financial Supervisory Commission said.
The reduction was due to a 22 percent year-on-year decline in the cumulative sales of foreign-currency insurance policies in the first 10 months to NT$421 billion, the data showed.
First-year premiums of investment-linked foreign-currency insurance policies plunged 46 percent year-on-year to NT$7.15 billion, while those of traditional foreign-currency insurance products halved year-on-year to NT$16.97 billion, the data showed.
US dollar-denominated policies, Chinese yuan-denominated policies and Australian dollar-denominated policies all retreated from a year earlier, the government data showed.
The decline in the sales of investment-linked foreign-currency policies could be attributed in part to Nan Shan Life Insurance Co (南山人壽) being barred by the commission from selling new investment-linked policies until it fixed a faulty information technology system, a commission official said by telephone.
It also seemed that traditional foreign-currency insurance policies had fallen out of favor, as they provided lesser returns after their declared interest rates were trimmed by insurance companies, the official said.
Many of the nation’s life insurers in October cut their declared interest rates — which decide how big a bonus policyholders gain each month — for their New Taiwan dollar and US dollar products in a bid to reduce operating risk.
Sales of foreign-currency insurance policies were also likely negatively affected by fluctuations in the exchange rates between the NT dollar, US dollar and the yuan, the official said.
Some consumers preferred traditional NT dollar-denominated policies with higher returns ahead of the commission implementing tighter standards on those policies next year, the official added.
First-year premiums of US dollar-denominated policies, which account for 80 percent of the market, fell 21 percent year-on-year to US$11.77 billion in the first 10 months of the year.
Sales of yuan-denominated policies shrank 45 percent year-on-year to 5.12 billion yuan (US$730.5 million) in the first 10 months due to a 46 percent slump in the sales of investment-linked products, with first-year premiums of traditional policies falling 4 percent year-on-year, the commission’s data showed.
First-year premiums of Australian dollar-denominated policies fell 3 percent year-on-year in the first 10 months, as a 29 percent decline in the sales of index-linked policies offset a 19 percent gain in the sales of traditional policies, the data showed.
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