HONG KONG–(BUSINESS WIRE)–AM Best is maintaining a stable market segment outlook on Taiwan’s non-life insurance segment, citing robust underwriting and investment performance in 2020 and carriers’ healthy risk-adjusted capitalisation levels.
The Best’s Market Segment Report, titled, “Market Segment Outlook: Taiwan Non-Life Insurance,” notes that Taiwan has managed for the most part to keep the COVID-19 pandemic under control, relative to its peers, and registered real GDP growth of 3.1% in 2020. The pandemic had limited impact to Taiwan’s non-life insurance market, which experienced direct premium written (DPW) growth of 6.2% in 2020, driven by growth in the motor and fire insurance business lines. The report notes that pandemic-related insurance products, including pandemic protection and vaccination protection products, has gained significant traction in 2021, with DPW from these products contributing materially to non-life insurance growth in the first half of 2021.
Although non-life companies have benefited from relatively benign natural catastrophe experiences in recent years, Taiwan remains geographically prone to typhoons and earthquakes, which could subject insurers’ technical results to volatility. However, the overall underwriting performance of the market has been stable, with a five-year average net combined ratio of 95.6%.
The investment results of non-life insurers continue to be a significant driver of the segment’s overall operating performance. However, prolonged low interest rates, capital market volatility and exchange rate fluctuations may negatively impact investment yields going forward.
AM Best also notes that the risk-adjusted capitalisation of most players in Taiwan’s non-life insurance market is sufficient, and is viewed as resilient and able to withstand extreme scenarios.
To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=314984.
To view current Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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