Taiwan Life Insurance Co (台灣人壽) is considering injecting capital into its subsidiary CTBC Insurance Co (中國信託產險), as the unit has been paying out about NT$5 million (US$168,294) per day in compensation for COVID-19 claims, parent company CTBC Financial Holding Co (中信金控) told an investors’ conference in Taipei yesterday.
The amount of the injection has not been finalized, as the number of claims affecting CTBC Insurance’s financial strength would change as the government changes its disease prevention measures, such as the isolation rules, CTBC Financial spokeswoman Chiu Ya-ling (邱雅玲) said.
The cash injection would not reduce Taiwan Life’s capital adequacy too much, Chiu said.
Photo courtesy of Taiwan Life Insurance Co
Taiwan Life’s risk-based capital (RBC) ratio stands at 335 percent and is expected to remain above 300 percent even after injecting capital into CTBC Insurance, she said.
Having sold 400,000 COVID-19 insurance policies, CTBC Insurance said that it has assigned more staff to deal with claims as domestic COVID-19 infections climb.
CTBC Financial reported that net profit in the first quarter fell 17 percent year-on-year to NT$16.29 billion, with subsidiaries CTBC Bank (中國信託銀行), CTBC Securities Co Ltd (中信證券) and Taiwan Life Insurance all reporting annual declines in net profit.
CTBC Financial’s revenue fell 0.3 percent from a year earlier, as a 16 percent increase in annual net interest income was offset by declines of 3.7 percent in annual fee income and 51 percent in annual revenue from trading, derivatives and foreign exchange.
CTBC Bank is monitoring the effects of China’s lockdowns on its business there, after the bank wrote off a loan loss of US$28 million related to a US$40 million loan to Chinese RISE Education Cayman Ltd (瑞思教育), Chiu said, adding that the bank has tightened its criteria for lending to education companies in the Chinese market.
CTBC Bank’s net interest margin edged up to 1.47 percent at the end of March, from 1.43 percent a quarter earlier, but its fee income from wealth management shrank 18 percent to NT$4.18 billion, it said.
Taiwan Life’s first-year premiums fell 28 percent year-on-year to NT$22.4 billion, because the premiums from investment-linked policies plummeted 78 percent to NT$4.9 billion from NT$22.71 billion a year earlier amid volatility in global markets, company data showed.
Assets invested by Taiwan Life totaled NT$2.02 trillion, up 0.8 percent from a quarter earlier, while the insurer invested more in equities and domestic fixed income, and reduced its weighting of mutual funds and overseas fixed income, it said.
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