The Ministry of Finance has decided to lower the annual premium for mandatory auto insurance coverage for next year by an average of 8.4 percent, while the premium for mandatory motorcycle insurance is to remain unchanged.
"Lower auto insurance claims this year allow auto insurance premiums for next year to be lowered," said a Fubon Insurance Co (富邦產險) manager, who asked only to be identified by his surname, Chen.
The new rates will be reflected in auto insurance policies starting on Jan 1.
Mandatory auto insurance coverage was required in accordance with legislation in 1996, providing benefits to victims who are killed, injured or disabled in an auto accident. The beneficiaries include insured drivers and accident victims with subsidies of up to NT$1.4 million for the loss of life.
With a 16 percent market share worth NT$1.8 billion in mandatory auto insurance, Fubon is expected to be hit by lost insurance income next year after the new rate cut begins, he said.
Shingkong Insurance Co (
According to the ministry's insurance department, the premium for passenger cars will be lowered 7.4 percent from NT$2,362 to NT$2,187 per year while the premium for light trucks will be lowered from NT$7,323 to NT$5,223 by 28.7 percent. Premiums for taxies, buses and business coaches will be cut by from 10 percent to 28 percent.
Premiums for motorcycles, however, will remain unchanged, with the annual rate staying at NT$576 for scooters and NT$777 for motorcycles.
According to the Ministry of Transportation and Communications, there are 6.9 million cars in use in Taiwan. Some 5.9 million cars have basic insurance coverage and generate annual premiums of around NT$12 billion, while the nation's mandatory motorcycle insurance generates NT$5 billion, with a total of 7.4 million insured motorcycles nationwide.
The ministry may slightly adjust the premium according to the insured car owners' age and gender, the insurance department said in a statement Monday.
Facing another tough year ahead, auto insurers are expected to lose NT$1 billion in mandatory auto insurance premiums next year as a result of the rate change.
But Chen said the impact should be minimal since insurers only earn fixed administrative fees from the transactions.
But Robert Chen (
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