Allianz Taiwan Life Insurance Co (安聯人壽) yesterday forecast that its first-year premiums would decline this year, as consumers hold back on purchasing investment-linked products due to volatile markets.
In the first five months of this year, first-year premiums were flat year-on-year at NT$607.3 billion (US$19.26 billion), Allianz Taiwan senior vice president Tom Yang (楊承清) told a news conference.
Sales of traditional products rose from a year earlier, but sales of unit-linked insurance policies plunged about 20 percent during the same period, Yang said.
The volatility in global stock markets since the fourth quarter of last year has trimmed the returns of investment-linked policies, prompting some consumers to turn conservative and shift to buying traditional policies or other financial instruments, he said.
Although Taiwan’s stock market has recovered this year to date, uncertainties remain amid the US-China trade war, he said.
The company forecast that first-year premiums of investment-linked products would fall 20 percent annually this year, or a decrease of NT$100 billion, for a full-year total of between NT$1.2 trillion and NT$1.3 trillion, compared with NT$1.38 trillion last year, Yang said.
“This year would be a tough year for insurance companies, as the regulator is to impose stricter regulations, which would drive many companies to review their products or to stop selling some [products],” Allianz Taiwan CEO Danny Lam (林順才) told the Taipei Times.
Insurers would take some time to adopt those amendments, although they were proposed by the Financial Supervisory Commission with good intentions, Lam said.
The company already sells few insurance savings products that the regulator plans to closely monitor, therefore it has no plan to change its marketing program soon, he said.
The company would still review its product portfolio after the commission announces further regulations, he added.
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