As if there weren't already enough players in Taiwan vying for a share of the increasingly competitive life insurance market, the UK's first entrant is set to make its official start this week.
Prudential Assurance Co (Taiwan) (
Already the company has shown it's serious about Taiwan, purchasing a further 57.8 percent of Chinfon Life Insurance (
At Prudential's opening ceremony last Friday, the company even announced plans to donate NT$10 million to the 921 reconstruction effort, directing funds mostly to the area of child psychology.
Following the absorption of Chinfon into the Prudential fold, top management has been reshuffled with Tu Cha-chi (杜1顫R), president of Prudential's Asia operation, being named as the chairman of the Taiwan operation.
The president of Prudential's Greater China operation, Dominic Leung (
"Our priority is to listen carefully to what the consumer needs," Leung said at the opening ceremony. "That has been the tradition of Prudential Assurance since 1848. Since only by understanding the different requirements of different countries and people, can we provide proper protection and the services that customers really need. In Taiwan, we will stick to the principle of sincerity and listening."
Prudential Assurance UK currently has over US$250 billion in assets under management covering its mutual funds, unit trusts and other financial products.
It has more than 25,000 employees and an excess of 10 million policyholders around the world.
In 1932, Prudential established its first operation in Asia and it is currently one of the largest foreign insurers in the region with operations in Hong Kong, Singapore, Malaysia, Thailand, Indonesia, Philippine, India, China, and Vietnam
Prudential's arrival a big impact
Analysts say the arrival of Prudential could further heighten competition in the Taiwan life insurance market and provide more choices for local consumers.
With 31 life insurers -- 16 local and 15 foreign -- currently in the Taiwanese market, competition is tight. But analysts say Prudential's arrival could still have a big impact
Ten US life insurers have established their operations in Taiwan since 1987 when the market was opened up to American firms.
Since the industry was opened to all foreign and local companies in 1994, five foreign life insurers have established operations here.
Prudential Assurance is the first UK insurer to land in Taiwan since deregulation.
"Taiwan's life insurance market is quite mature already, but there is still a great potential in the market, considering the average coverage of consumers in Taiwan has been significantly lower than developed countries," said Prudential's Liang. "It is the major reason that Prudential Assurance made its commitment in the already crowded market.
"Though we have not set up an exact target for our early operations, we are confident of exploring the opportunity in the years to come."
With more and more competitors entering the market the past decade, the market shares of the largest domestic life insurers, Cathay Life (
According to Paribas Asia Security and the Life Insurance Association (
Shin Kong Life's market share has also dropped, from 20 percent to 14 percent today.
Together, the two insurers -- who have dominated the Taiwan market for the last four decades -- have seen their market shares in new policies drop from more than 60 percent to less than 40 percent in the last five years.
Meanwhile, the FYP market share of several foreign insurers has risen sharply, especially two US life insurers, Nan Shan Life (
Nan Shan Life, wholly-owned by American International Group, one of the largest life insurers in the US, has surpassed Shin Kong Life in the last two years to become the second largest FYP life insurer in Taiwan.
In the first quarter this year, it even exceeded Cathay Life in FYP, but failed to keep its lead in the remaining months.
But its 21 percent market share this year has brought heavy pressure for Cathay Life, industry executives said.
Aetna Life's market share in FYP has almost quadrupled from 3 percent to 11 percent in the last five years.
Several other newcomers have also seen their market share sharply increase recently.
Whether Prudential Assurance can successfully expand its market share in Taiwan from the No. 11 position created by its predecessor, Chinfon Life, has yet to be proven.
But the massive resources of its parent company should greatly help it to provide diversified financial products and services to local consumers.
Industry experts say Dominic Leung is a perfect candidate for Prudential Assurance to set up its marketing network in the highly competitive market.
With his previous experience in Nan Shan Life, Leung knows exactly what it takes to tackle the competition head-on.
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