AM Best has upgraded its outlook for Taiwan’s non-life insurance sector from negative to stable, pointing to a resurgence in capital strength among insurers in 2023 after significant pandemic-related losses the previous year.
“Insurers have taken steps to review their portfolios, non-renew unprofitable lines, increase rates, and transfer higher reinsurance costs to policyholders.”
The report, “Market Segment Outlook: Taiwan Non-Life Insurance,” highlights a recovery driven by prudent underwriting, robust top-line growth, and conservative investment strategies. Taiwan’s non-life insurance sector saw its capital position more than double in 2023 due to significant capital injections, reserve releases, and organic earnings. Despite this, capital levels remain lower than pre-pandemic figures. The sector also reported a sharp rise in pre-tax earnings, more than doubling year-over-year in the first seven months of 2024.
James Chan, Director of Analytics at AM Best, noted, “Insurers have adopted a more proactive approach, including offering risk advisory services and loss prevention measures, aiming to reduce claim frequency and severity.”
Taiwan’s non-life insurance segment continued to show strong growth, with an 11.4% increase in direct premiums written in July 2024, following double-digit growth in 2023. AM Best expects this trend to continue in the near term.
However, some challenges remain, including relatively low net investment yields compared to regional peers and the significant exposure to natural catastrophes. Taiwanese insurers remain cautious in structuring reinsurance programs, with retention levels staying stable despite rising reinsurance rates, and catastrophe coverage limits being sufficient for high-return periods.
For the full report, visit Best’s Market Segment Report.
AM Best will also be participating in the upcoming East Asian Insurance Congress (EAIC) in Hong Kong from 24-27 September 2024, celebrating its 25th anniversary in Asia-Pacific. The event will feature AM Best’s market development team, including Rob Curtis, CEO & Managing Director of AM Best Asia-Pacific. For meeting requests at the EAIC conference, contact Curtis at [email protected].
AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. The company operates in over 100 countries, with offices in London, Amsterdam, Dubai, Hong Kong, Singapore, and Mexico City. For more information, visit www.ambest.com.
