Allianz Taiwan Life Insurance Co (安聯人壽) expects growth in first-year premiums to slow for the rest of the year from a 238 percent jump in the first four months amid fears that the US Federal Reserve’s exit strategy may weaken sales of investment-linked policies, newly appointed chief executive Danny Lam (林順才) said yesterday.
The local unit of the German insurance giant will continue to focus on the supply of unit-linked products, while seeking to strengthen protection policies, after its formal integration on Friday with the Taiwanese division of HSBC Life Ltd, Lin said.
The insurer has already benefited from the deal under which HSBC banking branches would sell only Allianz life insurance products in eight Asian markets, including Taiwan, for 10 years, Lin said.
First-year premiums grew to NT$12.6 billion (US$420.39 million) from January to April, an increase of 238 percent, while bancassurance sales rose 411 percent, said Lin, who headed New York Life Taiwan (國際紐約人壽) until recently and previously worked at ING Life Taiwan.
Lin attributed the robust performance to improving risk appetite favorable to sales of investment insurance policies, especially products linked to high yield bond funds.
The trend continued last month, but has shown signs of slowing as fears over the Fed’s retreat grow while the fever for high yield bond funds is subsiding, Lin said.
The hot sales of high-yield funds led the Financial Supervisory Commission to warn investors of risks.
“They carry higher risks than expected and providers should alert investors beforehand,” commission Vice Chairwoman Jennifer Wang (王儷玲) said.
To diversify its product lines and sales channels, Allianz Taiwan plans to develop more protection insurance products and increase the number of its sales agents from 1,200 to 1,700 toward the end of the year, Lin said.
“The expansion of the sales force is a tough challenge given the high turnover and the company’s heavy dependence on unit-linked policies,” he said, adding that agents are better at promoting protection products.
Despite stronger top lines, Allianz Taiwan Life may not turn a profit this year, as it will take time to digest acquisition costs, Lin said.
Allianz Taiwan does not expect yuan-based insurance policies to lift revenue much because of lackluster demand so far, he said.