By Kao Shih-ching / Employees reporter
First-year premiums (FYPs) generated by the nation’s life insurers final month plummeted 41 % from a 12 months earlier to NT$94.81 billion (US$3.17 billion), the Life Insurance coverage Affiliation mentioned in a report on Wednesday.
That adopted a decline of 37 % within the first quarter, the group mentioned.
Conventional life insurance coverage insurance policies’ FYPs dropped 48.5 % year-on-year to NT$40.9 billion final month, whereas these of investment-linked merchandise fell 34 % to NT$53.9 billion throughout the identical interval, following declines of 41.7 % and 32 % respectively within the first quarter.
An affiliation official attributed final month’s sharp falls to life insurers constantly slashing their merchandise’ declared rates of interest — which decide the bonuses that policyholders obtain — after charge cuts by the central bank and the US Federal Reserve in March.
Nevertheless, FYP progress had already misplaced its momentum within the first quarter, as insurance coverage merchandise supplied decrease returns amid a low rate of interest setting and as customers turned conservative because of new rules and considerations over the COVID-19 outbreak, the official informed the Taipei Occasions by phone.
The Monetary Supervisory Fee is anticipated to implement new rules in July, demanding life insurers set their declared rates of interest based mostly on rates of interest of their fixed-income funding, a change which may imply decrease returns for customers, the official mentioned.
FYPs of recent merchandise are unlikely to rebound after July, as life insurers are more likely to proceed reducing declared rates of interest, the official added.
“We will continue to see corrections throughout this year,” he mentioned.
Within the first 4 months of this 12 months, FYPs of conventional life insurance coverage merchandise slid 41 % to NT$212 billion, whereas these of investment-type merchandise decreased 33.6 % to NT$99.5 billion, the affiliation mentioned.
Nevertheless, medical insurance insurance policies noticed FYPs develop 11 % to NT$14.46 billion within the first 4 months of this 12 months, as customers turned extra involved about their medical insurance protection amid the outbreak, the affiliation mentioned.
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