Domestic non-life insurers are aiming to expand their hold on overseas markets after gaining the central bank’s approval to operate foreign currency-denominated businesses via their offshore insurance units (OIUs).
OIUs give firms access to foreign individuals and institutional clients and the arrangement comes with a 10-year tax exemption.
The central bank on Thursday approved Fubon Insurance Co’s (富邦產險) new foreign exchange businesses after approving Cathay Century Insurance Co (國泰世紀產險) earlier this month, about one year after the Financial Supervisory Commission opened up OIUs for domestic non-life insurers.
Cathay Century will initially focus on serving institutional clients’ general insurance and reinsurance needs, and gradually grow its OIU business by leveraging the footholds established by the firm’s parent company, Cathay Financial Holding Co (國泰金控), said Kevin Kuo (郭書彬), an OIU manager at Cathay Century.
“The tax incentives will allow for very competitive pricing on upcoming OIU products and services offerings,” Kuo said on Thursday.
In the January-to-July period, 14 insurers with OIU operations collected US$15.33 million in premiums, according to commission data.
Including reinsurance premiums, total collections were tallied at US$42.76 million during the period, the data showed.
Cathay Century posted a total net income of NT$2.1 billion (US$66.42 million) in the first seven months, markedly higher than the NT$350 million it reported during the same period last year, while Fubon Insurance’s total net income fell from NT$2.29 billion to NT$2.04 billion over the same period.
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