Taiwan Life earnings ‘volatile’ from interest-sensitive products reliance

The company has a 6% share of premium income as of 2023.

Taiwan Life Insurance Co.'s financial performance continues to improve, driven by its focus on regular-premium policies, which has boosted the value of new business margin over the past three years, Fitch Ratings said.

However, earnings are expected to remain volatile due to its reliance on interest-sensitive products, which are susceptible to market fluctuations. 

The insurer's annualised return on equity (ROE) rose to 17% in the first half of 2024, compared to 10% at the end of 2023, supported by strong equity market conditions. Average ROE from 2021 to 2023 was 7.5%.  

Risky assets accounted for 216% of shareholder equity and loss-absorbing reserves as of the first half of 2024, down from 249% at the end of 2023. 

Capital adequacy is expected to remain robust, with the regulatory risk-based capital ratio at 318% as of the first half of 2024, up from 305% at the end of 2023 and well above the regulatory minimum of 200%. 

The company has a 6% share of premium income as of 2023, making it the sixth-largest insurer in Taiwan. 

It holds a 7% market share in first-year premiums as of the first half of 2024. 

Taiwan Life offers comprehensive products, including risk protection, savings, healthcare, and retirement solutions, and operates through a strong distribution network of 8,000 tied agents and bancassurance partnerships, including with CTBC Bank Co., Ltd.  

Fitch's stable outlook for the insurer reflects expectations of continued sound capitalisation, gradual improvement in financial performance, and steady market positioning, though challenges related to investment risks and earnings volatility persist.