Aggregate premium incomes collected by the nation’s life insurance companies in the first half of this year totaled NT$1.02 trillion (US$32.85 billion), down 7.7 percent from the same period last year, data released yesterday by the Life Insurance Association of the ROC showed.
That figure includes first-year premiums (FYPs), which fell 16.4 percent annually to NT$263.23 billion in the first six months, while renewal premiums — the subsequent premiums paid to keep the policy active — increased 4.2 percent to NT$753.97 billion over the same period, the association said in a report.
By product, traditional insurance policies generated premiums of NT$918.43 billion in the first half of this year, decreasing 7 percent year-on-year, with their FYPs falling 14.6 percent to NT$206.14 billion and renewal premiums dropping 4.5 percent to NT$712.29 billion over the period, the report said.
Photo courtesy of Nan Shan Life Insurance Co
Investment-linked insurance policies contributed premiums of NT$98.78 billion in the January-to-June period, falling 13.7 percent year-on-year, with FYPs down 22.5 percent to NT$57.1 billion.
However, renewal premiums rose 2.1 percent to NT$41.68 billion, it said.
The association blamed the decline in premiums of traditional insurance products on the effects of interest rate hikes by central banks, as local life insurers became conservative under the monetary tightening environment and moved slower to raise the declared interest rates for their products.
Although higher declared rates mean higher bonuses for policyholders, they leave insurers vulnerable to foreign-exchange risks, as most of their investments target overseas assets.
As a result, policyholders were either waiting or allocating their funds for other purposes, which was slowing sales of traditional insurance products, the association added.
As for the fall in premiums of investment-type insurance policies, the association pointed to the uncertainty in the global economy, which affects insurance policyholders’ attitude toward investment.
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