Local life insurers saw their foreign-exchange losses narrow last month, as the New Taiwan dollar weakened against the US dollar, Financial Supervisory Commission statistics showed yesterday.
The commission yesterday raised the exchange-rate risk factor for the first time to 6.61 percent from 4.25 percent in a bid to strengthen insurance companies’ abilities to manage exchange-rate fluctuation risks.
The adjustment came as the NT dollar experienced greater fluctuation, the commission said, adding that the forex risk factor has never been adjusted since it was implemented in 2003.
Local life insurers booked a total foreign-exchange loss of NT$139.8 billion (US$4.57 billion) as of last month, after the losses reduced to NT$16.5 billion last month from NT$24.9 billion in July.
The Insurance Bureau said that the main losses stemmed from heavy hedging losses amounting to NT$404.3 billion.
Local insurance companies booked exchange gains of NT$283.7 billion as the NT dollar depreciated 2.96 percent versus the US dollar in the first eight months of this year, the commission said.
Despite significant forex losses, insurance companies accumulated a total of NT$129 billion in pre-tax profits in the January-to-August period, up NT$28.5 billion, or 28.4 percent, annually from the same period last year, the bureau said.
Life insurers reported 19.6 percent annual growth in pre-tax profits totaling NT$116.2 billion, bureau statistics showed.
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