HONG KONG–(BUSINESS WIRE) –Preferably is Maintaining a stable market segment outlook for Taiwan’s non-life segment, relying on its robust underwriting and investment performance in 2020 and healthy risk-adjusted capitalization of insurance companies.
the Best, titled “Market Segment Outlook: Taiwan Non-Life Insurance,” notes that Taiwan has largely managed to keep the COVID-19 pandemic under control and posted real GDP growth of 3% in 2020 compared to its peers , 1% registered. The pandemic had limited impact on Taiwan’s non-life insurance market, which saw direct written premium (DPW) growth of 6.2% in 2020, driven by growth in its auto and fire insurance businesses. The report finds that pandemic-related insurance products, including pandemic and vaccination protection products, gained significantly in importance in 2021, with DPW of these products making a significant contribution to the growth of non-life insurance in the first half of 2021.
Although non-life insurance companies have benefited from relatively favorable natural disaster experiences in recent years, Taiwan remains geographically vulnerable to typhoons and earthquakes, which could expose insurers’ technical results to volatility. However, the total underwriting performance of the market was stable with an average net combined ratio of 95.6% on a five-year average.
The investment results of property insurers continue to be a key driver of the segment’s overall performance. However, persistently low interest rates, capital market volatility and exchange rate fluctuations can negatively affect investment returns in the future.
AM Best also notes that the risk-adjusted capitalization of most players in the Taiwanese non-life insurance market is sufficient and considered resilient and able to withstand extreme scenarios.
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