The combined net worth of local life insurers recovered to NT$1.77 trillion (US$59.09 billion) as of the end of April, after plunging to NT$1.46 trillion at the end of March, the lowest in the past 13 months, Financial Supervisory Commission data showed.
In March, life insurers saw their combined net worth drop by NT$533.7 billion from NT$1.99 trillion a month earlier as the valuation of their investment assets, such as stocks or bonds, fell due to a global market rout amid the COVID-19 pandemic.
Life insurers are required to assess their financial assets, which make up a part of their net worth, every month to monitor whether their equity-to-assets ratio, a key solvency measure, remains above the regulatory minimum of 3 percent, the commission said.
“The deterioration in net worth in March explained why four firms — Shin Kong Life Insurance Co (新光人壽), Hontai Life Insurance Co (宏泰人壽), Chunghwa Post Co (中華郵政) and Mercuries Life Insurance Co (三商美邦人壽) — saw their equity-to-assets ratios dip below 3 percent then,” a commission official said by telephone on Friday.
In the first four months, life insurers had seen their combined net worth decline by NT$151.9 billion from NT$1.92 trillion at the end of last year, commission data showed.
Separately, life insurers reported that cumulative foreign exchange losses grew to NT$97.9 billion at the end of April from NT$52.8 billion a month earlier, as the US dollar weakened against the New Taiwan dollar, reducing the value of their US dollar-denominated assets, commission data showed.
The US dollar traded at a 12-month low of NT$29.8 on April 30, compared with NT$30.3 on April 1, central bank data showed.
Due to foreign exchange losses and lower first-year premiums, life insurers’ combined pretax profit totaled NT$6.7 billion in April, the lowest in four months, compared with NT$23.3 billion, NT$26.4 billion and NT$13.6 billion in the first three months respectively, commission data showed.
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