First-year premiums (FYPs) of foreign-currency insurance policies last year declined 16 percent year-on-year to NT$518.85 billion (US$17.08 billion) due to lower investment returns and interest rates, the Financial Supervisory Commission (FSC) said on Tuesday.
Sales of investment-linked policies plunged 30 percent annually to NT$166.86 billion, while those of traditional insurance products dipped 7 percent to NT$351.99 billion, commission data showed.
FYPs of yuan-denominated policies fell by 43 percent from a year earlier to 5.82 billion yuan, the biggest drop among the three major foreign-currency products, followed by US dollar-denominated policies with a decline of 14 percent and those denominated in Australian dollars with a decline of 3 percent, the data showed.
Foreign-currency insurance policies last year fell out of favor, as the nation’s major life insurers continued to trim the products’ declared rates, which decide how big a bonus policyholders gain each month.
Due to high economic uncertainty in overseas markets — such as those caused by US-China trade tensions and Brexit’s aftermath — local investors became more conservative, turning from foreign-currency investment-type products to New Taiwan dollar-denominated policies, the commission said at a news conference.
However, Shin Kong Life Insurance Co (新光人壽) bucked the trend with a 12.6 percent increase year-on-year in the sales of foreign-currency policies to NT$80.53 billion, which accounted for 69 percent of all its FYPs, the company said in a statement.
The insurer plans to continue enhancing its marketing of foreign-currency products, as they are helpful in reducing the cost of currency hedging, it said.
In related news, Nan Shan Life Insurance Co (南山人壽) general manager Hsu Miao-chiu (許妙靜) applied for retirement on Tuesday.
The insurer did not explain why Hsu wants to retire, but said that its board of directors would discuss the application soon, it said in a regulatory filing.
The announcement followed FSC Chairman Wellington Koo’s (顧立雄) call on Thursday last week that the company’s general manager uphold its corporate governance by fighting improper orders from major shareholders, after learning that a recent punishment of senior management was based on a request from Ruentex Group (潤泰集團) chairman Samuel Yin (尹衍樑), a major shareholder.
“[Nan Shan’s] general manager should stand up and say ‘no’ to the major shareholders if they have improper demands or suggestions,” Koo said.
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