Taiwan’s biggest insurers posted a total loss of almost NT$19 billion (US$624 million) last month due to currency volatility after US President Donald Trump warned of a wave of global trade tariffs.
The insurers sustained the worst shortfall in a single month in one-and-a-half years, the Chinese-language Economic Daily News reported.
Among the six biggest, Nan Shan Life Insurance Co (南山人壽) posted the largest loss at NT$9.09 billion. KGI Life Insurance Co (凱基人壽) was the only one among the largest to avoid a hit, reporting a net profit of NT$431 million.
Photo: Tyrone Siu, Reuters
The big shortfalls came even before the New Taiwan dollar’s spike early this month against the greenback, which raised concerns about the industry’s hedging and investment strategies.
Shares of the insurers rose yesterday, buoyed by a broad rally in the region after the US and China agreed to temporarily lower tariffs.
“Taiwan dollar has weakened over the past few days and if that can continue, it can take pressure off their earnings,” Bloomberg Intelligence analyst Steven Lam said.
Insurers are also benefiting from the stock market recovery, with last month’s earnings now backward looking, he said.
Cathay Life Insurance Co (國泰人壽) reported a loss of NT$2.57 billion last month due to higher hedging costs, Cathay Financial Holding Co (國泰金控) said in a statement.
The firm said Trump’s tariff announcement last month exceeded expectations, raising hedging costs.
Fubon Life Insurance Co (富邦人壽) reported a net loss of NT$2.41 billion, citing volatile global financial markets due to US trade policies, while Shin Kong Life Insurance Co (新光人壽) posted a net loss of NT$3.81 billion and Taiwan Life Insurance Co (台灣人壽) had a net loss of NT$1.32 billion last month.
The losses add to evidence that Taiwan’s life insurers might be overexposed and under-hedged relative to their US dollar investments.
The NT dollar rose more than 6 percent in the first two trading days of this month, effectively reducing the value of unhedged US dollar investments, leading the Financial Supervisory Commission to offer assurances on Tuesday last week that no insurers have had solvency issues so far.
The central bank the same day announced it would inspect banks to ensure that fund inflows are for investment, not currency speculation. The NT dollar has since stabilized.
Fubon Life said it has increased its hedging to mitigate the currency effects of NT dollar gains, adding it would closely monitor the market and dynamically adjust its hedging to handle currency risks.
Cathay Life, which had its first monthly loss since last year, said hedging costs rose last month, but the effect is controllable.
Goldman Sachs Group Inc analysts said in a note released on Thursday last week that a 10 percent appreciation of the NT dollar against the greenback could lead to about US$18 billion of unrealized currency losses for local insurers, who hold about US$710 billion of foreign currency assets.
Such a move would wipe out the roughly US$6.6 billion reserves insurers have for currency volatility, Goldman’s analysts wrote.
After several years flying high as Asia’s best Nvidia Corp proxy, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is increasingly vying with other artificial intelligence (AI) stocks for investor attention. Stock traders are chasing a wider array of beneficiaries as mainstream usage of AI creates demand for hardware beyond the most-advanced chips TSMC makes for Nvidia. Subthemes from the deepening memory crunch to advances in robotics are also luring bids. At the same time, investment caps on single stocks are pushing funds to diversify, while retail investors long familiar with TSMC through its US depositary receipts are being offered a broader set of
TECH RELIANCE: Growth is increasingly reflecting an unequal K-shaped distribution, where technology sectors outperform and other industries struggle, an expert said Standard Chartered Bank has significantly raised its forecast for Taiwan’s economic growth to 9.5 percent this year, up from 7.6 percent previously, citing surging artificial intelligence (AI) demand driving exports, semiconductor production and investment. The upgrade reflects a sustained AI supercycle that continues to fuel demand for advanced chips and technology infrastructure, which form the backbone of Taiwan’s exports, the bank said in a report this week. “We raise our 2026 growth forecast to reflect a much stronger-than-expected first-quarter GDP figure,” Standard Chartered senior economist for greater China and Asia Tommy Wu (胡東安) said in the report. Driven largely by a 35.3 percent
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
Two of Taiwan’s international carriers, Starlux Airlines Co (星宇航空) and EVA Airways Corp (長榮航空), have retained the five-star airline rating awarded by international airline review organization Skytrax. Starlux was awarded the distinction for a second consecutive year, while EVA Air received it for the 11th straight year, Skytrax said in statements released yesterday and on Thursday last week, respectively. The five-star rating is considered one of the airline industry's highest honors and is awarded following professional audits of airline product and frontline service standards, Skytrax said. The ratings are based on in-depth assessments using unified global quality standards rather than customer review scores
RSS