Taiwan’s biggest life insurers yesterday posted profits for last month after the regulator rolled out new rules to allow companies to access extra reserves to offset shortfalls from gains in the local currency.
Cathay Life Insurance Co (國泰人壽) posted profits of NT$2.68 billion for last month, the company said in a statement, a steady increase from NT$440 million in May.
Nan Shan Life Insurance Co (南山人壽) reported profits of NT$11.28 billion, surging from NT$13 million the previous month.
Photo: Tyrone Siu, Reuters
Fubon Life Insurance Co (富邦人壽) said its profits reached NT$8.74 billion, compared with losses of NT$9.14 billion in May, while Taiwan Life Insurance Co (台灣人壽) and KGI Life Insurance Co (凱基人壽) also reported profits of NT$5.77 billion and NT$2.46 billion respectively, reversing previous losses.
Shin Kong Life Insurance Co (新光人壽) was expected to release its earnings later yesterday. The insurer posted losses of NT$15.38 billion in May.
The New Taiwan dollar spiked about 3.5 percent past NT$29 per US dollar last month before it slumped in a sudden move on the last day of the month. That erased some gains for the month and fueled speculation the central bank intervened.
There are still lingering concerns over a NT dollar appreciation after it cost the sector about US$9 billion in foreign exchange losses in the first five months of this year.
Fubon Life said it will allocate part of its liability reserves to its foreign exchange reserves to deal with increased currency swings, as did Cathay Life, which said the new rules will help the industry get “back to normal.”
“Net earnings impacts for 2025 are likely still negative if taking into account the additional contribution to FX reserves required under the new measures,” JPMorgan Chase & Co said in a note, adding that earnings and capital pressure largely eased last month for most life insurers.
Assets of Taiwan insurers reached NT$21.7 trillion by the end of May, with a hedging ratio at around 64 percent for those exposed to currency mismatch risk, the Financial Supervisory Commission said.
The NT dollar has stabilized at around the NT$29 level this month after the huge fluctuation from April to last month. However, the impact from potential US tariffs on Taiwan is still unclear while the negotiation is ongoing, and the risk for the local currency to appreciate again still remains.
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