First-year premiums (FYPs) of foreign-currency insurance policies in April were NT$27.1 billion (US$914.3 million), the lowest in the past six months, as the COVID-19 pandemic affected insurers’ sales activities, data released on Tuesday by the Financial Supervisory Commission showed.
The FYP represented a 45 percent plunge from a year earlier and was larger than a 13 percent annual decline in the first quarter, which the commission attributed to a 58.8 percent retreat in sales of investment-linked foreign-currency insurance policies to NT$6.3 billion and a decline of 38 percent in sales of traditional foreign-currency insurance products to NT$20.8 billion.
Although consumers in April were still interested in buying US dollar-denominated insurance products because of the cheaper greenback against the New Taiwan dollar, foreign-currency insurance policies in general saw weaker momentum as insurers could not hold regular marketing events amid the pandemic, a commission official said on Wednesday.
Insurers tend to rely on face-to-face customer visits to introduce foreign-currency insurance policies, which are more complicated than NT dollar products and involve foreign-exchange risk, the official said.
Overall, cumulative FYPs of foreign-currency insurance policies decreased 21 percent annually to NT$160.2 billion during the January-to-April period, a smaller decline than a 41 percent drop in FYPs of all life insurance policies to NT$268 billion during the same period, data showed.
That was because declared interest rates of foreign-currency products — which determine the bonuses that policyholders receive — were still higher than those offered by the NT dollar insurance products, the official said.
For example, US dollar products’ declared interest rates remained above 3 percent, while the rates of NT dollar products were at about 2 percent.
FYPs of US dollar policies totaled US$5 billion in the first four months, down 11 percent from a year earlier, while those of yuan-denominated policies shrank 77 percent to 562 million yuan (US$79.4 million) and Australian dollar policies fell 42 percent to A$230 million (US$158 million) over the same period, data showed.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
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