The Financial Supervisory Commission (FSC) on Thursday ordered four non-life insurance companies to raise new capital by the end of June after their capital solvency conditions worsened due to massive COVID-19 insurance policy payments.
At the end of last year, CTBC Insurance Co (中國信託產險), Fubon Insurance Co (富邦產險), Tokio Marine Newa Insurance Corp (新安東京海上產險) and Hotai Insurance Co (和泰產險) failed to meet risk-based capital (RBC) ratios, the commission said.
The FSC uses the ratio to gauge an insurer’s capital adequacy, setting 50 percent as the regulatory minimum and 200 percent as a healthy level.
Photo courtesy of Hotai Insurance Co
All four insurers’ RBC ratios fell into negative territory at the end of last year, as they suffered heavy losses due to massive compensation to COVID-19 policyholders, the commission said.
The four companies must restore their solvency levels by raising fresh capital by the end of June, or they would be taken over by the commission within 90 days, it said.
Fubon Insurance had an RBC ratio of minus-37.25 percent, while Hotai Insurance had an RBC ratio of minus-321 percent, Tokio Marine Newa Insurance minus-1,078 percent and CTBC Insurance minus-1,680 percent, FSC data showed.
Fubon Insurance’s board of directors yesterday approved a plan to issue 1 billion new common shares via a private placement, as the insurer’s accumulated losses have exceeded half of its share capital, its parent Fubon Financial Holding Co (富邦金控) said in a statement to the Taiwan Stock Exchange.
Fubon Insurance aims to raise NT$16 billion this time after a capital injection of NT$15 billion in August last year to address the problem.
Hotai Insurance plans to scrap NT$4.5 billion from its share capital to absorb losses and then raise NT$4.5 billion by issuing 450 million common shares via a private placement to improve its financial status, its parent Hotai Motor Co (和泰汽車) said in a filing to the Taiwan Stock Exchange yesterday.
Hotai Insurance last year raised NT$20 billion and NT$6 billion after two separate share issues.
Another insurer, Chung Kuo Insurance Co (兆豐產險), had an RBC ratio of minus-8.8 percent at the end of last year, but was able to restore it to 200 percent after a fresh capital injection of NT$6 billion, the commission said.
Overall, the nation’s six major non-life insurers that sold a majority of the COVID-19 insurance policies have raised fresh capital of NT$112.5 billion to increase their adequacy ratios, the commission’s data showed.
Meanwhile, Mercuries Life Insurance Co (三商美邦人壽保險) and Hontai Life Insurance Co (宏泰人壽) are required to submit plans to enhance their capital adequacy as their equity-to-assets ratio have slid below 3 percent, the commission added.
The capital inadequacy issues mark the latest challenge facing local insurers after rate hikes and tumbling stock markets.
Additional reporting by Lisa Wang
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in server chips, expects revenue to decline this year due to sagging demand for 5-nanometer artificial intelligence (AI) chips from a North America-based major customer, a company executive said yesterday. That would be the first contraction in revenue for Alchip as it has been enjoying strong revenue growth over the past few years, benefiting from cloud-service providers’ moves to reduce dependence on Nvidia Corp’s expensive AI chips by building their own AI accelerator by outsourcing chip design. The 5-nanometer chip was supposed to be a new growth engine as the lifecycle
RSS