Taiwan Life Insurance Co (台灣人壽保險) yesterday said it expects a 6 percent annual rise in first-year premium (FYP) collections this year to NT$100 billion (US$2.97 billion) as the nation’s oldest insurer begins operating under its new parent, CTBC Financial Holding Co (中信金控).
CTBC Financial last year acquired Taiwan Life through a share swap, with Taiwan Life to be the surviving insurance unit to leverage the company’s brand following a merger with the group’s CTBC Life Insurance Co Ltd (中國信託人壽).
Prior to the merger, the two companies were of similar scales, with CTBC Life Insurance’s FYP valued at NT$77.4 billion as of Jan. 1, compared to Taiwan Life’s NT$16.4 billion.
The insurer represents about 25 percent of CTBC Financial’s operations after the deal, Taiwan Life said at a press event to launch four new policies designed for the nation’s aging population.
After the union, Taiwan Life’s total assets would swell to NT$1.6 trillion and serve 1.45 million customers holding an estimated 2.85 million insurance policies, while its headcount is to expand to 2,272 office-based staff and telemarketers and 8,431 sales agents, Taiwan Life said.
The firm’s risk-based capital ratio is rated at more than 300 percent, Taiwan Life said.
“In addition to banks, we plan to increase revenue contribution from our sales agents,” Taiwan Life president Steve Lin (林欽淼) told reporters.
Regarding an US$22.73 million in impairment costs booked by Taiwan Life last month, Lin said that despite the setback, CTBC Financial’s insurance operation was in the black as of the end of last year.
The impairment amount is about 60 percent of the US$37.3 million that Taiwan Life has invested in senior unsecured corporate bonds issued by Brazilian mining company Samarco Mineracao SA.
Although senior debt has higher priority than other unsecured debt owed by the issuer, Taiwan Life sees little hope in recovering all of its investment after two dams in Brazil owned by Samarco suffered catastrophic failure in November, dumping 60 million cubic meters of possibly toxic iron waste into a river.
“We did not step on a landmine; Samarco remains a viable company for investments,” Lin said.
Lin said that a surge in policies sales caused a jump in expenses last month, which resulted in net loss of NT$2 billion among Taiwan Life and CTBC Life, which merged on Jan. 1.
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