20 Jan 2021
Posted in Insurance
Life insurance industry in Taiwan to reach TW$3.6 trillion in 2024, says GlobalData
The life insurance direct written premium in Taiwan is projected to grow from TW$3.0 trillion in 2019 to TW$3.6 trillion in 2024, according to GlobalData, a leading data and analytics company.
GlobalData has revised Taiwan’s Life insurance forecast in the aftermath of COVID-19 outbreak. As per the latest data, Taiwan’s Life insurance business is forecasted to grow at a compound annual growth rate (CAGR) of 3.6% during 2019–2024 against the pre-COVID estimates of 5.2%, due to the economic uncertainty triggered by the pandemic.
Shabbir Ansari, Insurance Analyst at GlobalData, comments: “In Q3 2020, Taiwan’s economy grew by 3.3%, which is faster than the other emerging economies in the Asia-Pacific region like India and China. In addition, by the end of 2021, nearly one-fifth of the country’s population will be over 60 years of age. The early economic recovery clubbed with aging population is expected to support the life insurance industry in the country.”
The country was able to avoid lockdown restrictions due to low number of COVID-19 cases and fatalities, which helped insurers in keeping their losses under control. Additionally, increased general awareness following the pandemic is expected to boost sales of new policies.
Taiwanese life insurers are adding new products to boost sales. They are engaging with customers to promote a healthy lifestyle and providing benefits such as premium discounts on reaching certain health targets. Insurer Gen Re has developed a ‘Spillover effect’ health insurance product in early 2020 focusing on the long-term care and dementia.
Technological advancement is another area that is gaining traction. Taiwanese insurers are adopting new technologies such as blockchain and artificial intelligence across the value chain for better customer service, claims processing and distribution.
In early 2020, 11 insurers announced a collaborative trial to test blockchain’s ability to simplify policy changes. In 2019, Taiwan Financial Supervisory Commission (FSC) approved three Internet-only banks Line Bank, Next bank and Rakuten Bank that can sell online insurance products offered by insurance companies.
Mr Ansari concludes: “Market volatility due to COVID-19 and strict regulatory requirements are prompting life insurers to move away from traditional savings products. Product diversification by life insurers and new products targeting the ageing population is expected to drive growth in life insurance premium in the short-term.”