The nation’s life insurance market might continue its downturn due to new regulations that took effect yesterday, but the market is expected to stabilize by the end of this year, Cathay Financial Holding Co (國泰金控) president Lee Chang-ken (李長庚) said yesterday in Taipei.
“It is foreseeable that sales of life insurance products would continue to fall in the short term as consumers are likely to purchase fewer policies after premiums went up,” Lee said at the Cathay Service Ecosystem Partnership Day.
“However, it seems to me that consumer demand for insurance products tends to be rigid and they might reconsider if they really need insurance products,” he said. “Nonetheless, insurance sales are expected to recover gradually.”
Photo: CNA
The new regulations would help the life insurance industry develop in a healthier way in the long term, he said.
Four new regulations took effect yesterday as the Financial Supervisory Commission (FSC) aims to boost life insurers’ financial solvency and prepare them for the implementation of new insurance contracts standard IFRS 17 in 2025.
The commission lowered life insurance companies’ liability reserve interest rates on all policies denominated in New Taiwan dollars and US dollars by 25 basis points and 50 basis points respectively to keep them in line with declining market rates.
The commission also set a new lower limit on the death benefit-to-policy value ratio, which would incentivize insurers to sell fewer savings plans or policies linked with wealth management, as they provide fewer death benefits.
Insurance companies must calculate the contractual service margins of their products and make sure the margins are positive when applying to the FSC.
Companies are also requested to adopt a mechanism to stabilize their products’ declared interest rates, which determine the bonuses that policyholders receive.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by