Taiwan’s non-life market outlook revised to negative from stable

Written by Adam Cadle

25/08/2022

The market segment outlook for Taiwan’s non-life industry has been revised to negative from stable by AM Best, as a resurgence of COVID-19 has led to significant losses on pandemic-related insurance policies.

The prolonged low interest rate environment in the country, as well as heightened capital market volatility during H1 2022, also continues to challenge non-life insurers, AM Best stated. The local stock market index declined by nearly 20% during the first six months of 2022, creating volatility to carriers’ capitalisation and operating results through capital gains and losses. After appreciating against the US dollar for the past three years, the Taiwanese dollar depreciated by 8% for the year to date 31 July.

“Several insurers may face capital erosion pressure where their regulatory solvency ratios could fall below the minimum requirement of 200% over the near term, AM Best senior director, analytics, Christie Lee, said.

“However these insurers typically have either parent financial holding companies or major financially strong shareholders to support them during the current difficult period.”

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