By Kao Shih-ching / Employees reporter
Life insurers’ first-year premiums (FYPs) final month declined 22.19 % yearly to NT$74.37 billion (US$2.45 billion), as individuals misplaced curiosity in merchandise with decrease returns, the Life Insurance coverage Affiliation stated in a report, including that it was the second consecutive month that FYPs had fallen.
Cathay Life Insurance coverage Co’s (國泰人壽) FYPs dipped 23.7 % to NT$10.66 billion, Nan Shan Life Insurance coverage Co’s (南山人壽) decreased 50 % to NT$9.09 billion and Shin Kong Life Insurance coverage Co’s (新光人壽) fell 12.91 % to NT$6 billion, affiliation knowledge confirmed.
Fubon Life Insurance coverage Co (富邦人壽) bucked the pattern with a light enhance of 1 % to NT$11.02 billion, the information confirmed.
Within the first two months of this yr, complete FYPs plunged 33.7 % year-on-year to NT$153.86 billion as gross sales of conventional life insurance coverage insurance policies fell 33 % to NT$124.39 billion and gross sales of investment-linked merchandise (ILPs) fell 35.1 % to NT$29.47 billion.
ILP gross sales declined as insurance coverage firms supplied decrease funding returns after the Monetary Supervisory Fee required that target-maturity bond funds be linked with insurance policies that solely put money into bonds with rankings of “BBB” or greater, the affiliation stated.
The retreat in FYPs for conventional life insurance coverage insurance policies may very well be attributed to insurers persevering with to lower the merchandise’ declared rates of interest, which decide the bonuses that policyholders would achieve, it stated.
Declared rates of interest for many New Taiwan dollar-denominated interest-rate delicate insurance policies offered by main insurers had been lowered to 2.1 % final month, from a spread of two.15 to 2.25 % a month earlier, the information confirmed.
Gross sales had been additionally affected by the fee’s coverage to scale back insurers’ legal responsibility reserve rates of interest by 25 foundation factors from Jan. 1, which prompted a median enhance of about 2 to three % in premiums for brand spanking new policyholders, the report stated.
Shoppers may stay detached to conventional life insurance coverage merchandise, as insurers should adjust to a brand new regulation that’s to take impact in July prohibiting them from providing unrealistically excessive returns, the report stated.
The components that weakened the momentum of life insurance coverage gross sales in January continued to weigh on the business final month, the affiliation stated.
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