State-run Mega Financial Holding Co (兆豐金控) is reportedly planning a second capital increase for its non-life insurance arm, Chung Kuo Insurance Co (兆豐產險), as losses from claims linked to COVID-19 insurance policies widen sharply.
The bank-focused conglomerate earlier announced it would participate in Chung Kuo’s capital increase of NT$2 billion (US$62.8 million) later this year to boost its capitalization.
Chung Kuo incurred a net loss of NT$3 billion in the first half of this year, with the losses likely to widen for the full year given still-sizeable outstanding pandemic policies.
Photo courtesy of Mega Financial Holding Co
The insurer last month set aside another provision of NT$2.7 billion to absorb losses from COVID-19-related claims, which have resurged after subsiding in previous months.
The extra provision is based on the assumption that 35 percent of the nation’s population would at some point contract COVID-19, unnamed sources said.
As of Tuesday, local COVID-19 cases had reached more than 6.9 million cases, or about 30 percent of the population.
Health experts now expect positive cases to reach 40 percent or even 50 percent, far above the 20 percent level on which Chung Kuo’s first capital increase was based, the sources said.
The first capital increase was intended to boost the non-life insurer’s risk-based capital to 300 percent, but the target appears untenable with COVID-19 infections spiking and a second capital increase inevitable, the sources said.
COVID-19 claim losses amounted to NT$6.6 billion as of Sept. 30 and could approach NT$10 billion, if positive cases continue climbing toward the end of the year, they said.
Mega Financial used its own money to fund the first capital increase, but would have to borrow through debt issuance or other means for the second fundraising, the sources said.
Taiwan Ratings Corp (中華信評) on Tuesday removed Chung Kuo’s ratings from the “CreditWatch” state with negative implications, as it believed the insurer’s capitalization would remain excellent for the next two to three years with the anticipated capital injection and strong support from its parent.
“These factors will help to absorb substantial claim losses on its COVID-19 pandemic insurance policies sold in the first half of 2022,” Taiwan Ratings said in a statement, affirming its “twAA” long-term financial strength rating and issuer credit rating for Chung Kuo.
Taiwan Ratings, a local arm of S&P Global Ratings, placed the company on the “CreditWatch” category on June 8.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Monday introduced the company’s latest supercomputer platform, featuring six new chips made by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), saying that it is now “in full production.” “If Vera Rubin is going to be in time for this year, it must be in production by now, and so, today I can tell you that Vera Rubin is in full production,” Huang said during his keynote speech at CES in Las Vegas. The rollout of six concurrent chips for Vera Rubin — the company’s next-generation artificial intelligence (AI) computing platform — marks a strategic
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
RSS