Life insurance companies in Taiwan increased their combined property investments by NT$128.8 billion (US$4.46 billion) to NT$1.34 trillion in the first eight months of this year, data compiled by the Financial Supervisory Commission (FSC) showed on Tuesday.
The increased investment by life insurers for the whole of this year is expected to hit a new record, compared with the previous high in 2012, when life insurers added NT$111.8 billion in new property investment, FSC data showed.
That prompted the FSC in 2013 to implement tighter regulations on real-estate investment by life insurers to curb an overheated market.
Photo: Hsu Yi-ping, Taipei Times
This year, the advance property investment came as insurers sought targets with better returns amid low interest rates and volatility in global financial markets, the commission said.
Among the new investments in the January-to-August period, NT$50.6 billion, or 39 percent, were in superficies, while the remaining funds were put into land, commercial buildings, hotels and build-operate-transfer (BOT) projects, it said.
Major deals included Nan Shan Life Insurance Co (南山人壽) winning superficies rights to a plot of land in Taipei’s Xinyi District (信義) for NT$31.28 billion and Fubon Life Insurance Co (富邦人壽) acquiring Sunworld Dynasty Hotel Taipei (王朝大酒店) for NT$25.52 billion, the data showed.
Life insurers pursue property investment for stable, predictable and long-term returns that help match their liability, as they provide long-term policies, the commission said.
As of the end of August, insurers’ combined property investment was 4.77 percent of their working capital, far below the regulatory ceiling of 30 percent, the commission said.
For this quarter, life insurers are expected to continue investing in properties, after Cathay Life Insurance Co (國泰人壽) last week announced that it won a BOT contract for a new facility in National Taipei University with an annual royalty of NT$1.67 billion.
Shin Kong Life Insurance Co (新光人壽) on Tuesday announced it had won a BOT contract for Nangang Bus Station for NT$610 million.
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