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
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Singapore-based ride-hailing and delivery giant Grab Holdings’ planned acquisition of Foodpanda’s Taiwan operations has yet to enter the formal review stage, as regulators await supplementary documents, the Fair Trade Commission (FTC) said yesterday. Acting FTC Chairman Chen Chih-min (陳志民) told the legislature’s Economics Committee that although Grab submitted its application on March 27, the case has not been officially accepted because required materials remain incomplete. Once the filing is finalized, the FTC would launch a formal probe into the deal, focusing on issues such as cross-shareholding and potential restrictions on market competition, Chen told lawmakers. Grab last month announced that it would acquire
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The artificial intelligence (AI) boom has triggered a seismic reshuffling of global equity markets, with Taiwan and South Korea muscling past European nations one by one. With its stock market now valued at nearly US$4.3 trillion, Taiwan surpassed the UK, Europe’s biggest market, earlier this month, data compiled by Bloomberg showed. South Korea is about US$140 billion away from doing the same. The tech-heavy Asian markets have shot past Germany and France in the past seven months. The shift is largely down to massive gains in shares of three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),
RSS