New entrants eating into insurers' market

The biggest life insurers, Cathay (國泰) and Shin Kong (新光), have been declining from their dominant positions in the life insurance industry. Together, they have given away more than 12 percent of market share to new life insurers in recent years.

And fierce competition in the life insurance market is just beginning, an analyst said, as more and more foreign and domestic players enter the fray.

According to the latest statistics from the Association of Life Insurers (壽險公會), total premium revenue from new policies industrywide in the first half of this year was NT$58.75 billion, or 5.99 percent more than the same period last year. This is the first time in 30 years that the growth rate has failed to reach double-digits.

The annual growth rate for new policies over the last 30 years has been around 20 percent, with the exception of 15 percent for last year, said a senior executive at a local life insurer. The expectation this year is that there will be single-digit growth, a sign the market has stepped into maturity, the executive said.

Total premium revenue from all life insurance policies in the first half, according to the association, was NT$262.3 billion. That's a 12.76 percent growth rate over the same period last year, but it is also less than previous years.

The largest life insurer in the first half was Cathay Life Insurance Co, with NT$13 billion in premium revenue. But its market share has dwindled 8.87 percentage points compared to the same period last year.

Nan Shan Life Insurance Co ranked second-largest in the first half, with NT$11.3 billion in premium revenue. But it was in the first place spot in the first quarter, and its 19.35 percent market share was very close to Cathay's 22.15 percent share.

The third-largest life insurer was Shin Kong Life Insurance Co, with NT$6.7 billion in premium revenue, but its growth rate also showed a 3.83 percentage point decline over last year.

The total market share of the "Big Three" life insurers for new policies was 52.97 percent, an 11.75 percentage point decline from 64.72 percent last year. The drop shows that after a number of new life insurers entered the market in recent years, the new competition has led the big players to lose significant market share.

"The good old days are over," said Henry Cheng (鄭百亨), managing director of Manulife Funds Direct (Taiwan). "If the big players do not try to improve their products and marketing strategy, they will lose more market share in the years to come."

Other life insurers that lost market share include Taiwan Life (台灣), Chung Shing Life (中興) and Central Insurance (中央), but those companies' share of the market has been insignificant.

Insurers with the highest growth rates in the first half were Global Life (國寶), which grew from a 0.27 percent share last year to a 1.26 percent share this year, a 381 percent jump in growth; Fubon Life (富邦), which posted 223 percent growth and China Life (中國), which grew posted 153 percent.

There are two new comers in the top 15 insurers: Global Life (國寶) (No. 13) and New York Life (No. 15).

Nine life insurers increased their market share, indicating that the smaller insurers are gaining more ground in their battle against the big players.

Top 15 life insurance companies in Taiwan
UNIT: NT$ MILLION
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