The total premium income of the life insurance industry from January to December last year reached NT$3,025bn ($108bn), a decrease of 7.9% from the previous year, according to statistics from the Life Insurance Association (LIA-ROC).
First-year life premiums fell to NT$784bn last year, plunging by 28.7% compared to 2019. Renewal premium income reached NT$2,241bn last year, an increase of 2.5% from 2019.

A summary of the life insurance sector’s premium income last year is as follows:












Type


2020 Premiums NT$m


2019 Premiums

NT$m


Change

%




 

First-year


Traditional


576,590


859,543


-32.9




Investment related


207,122


239,939


-13.7




Subtotal


783,712


1,099,482


-28.7




 

Renewal


Traditional


2,162,242


2,105.644


+2.7




Investment related


79,411


80,335


-1.2




Subtotal


2,241.653


2,185.979


+2.5




 

Total


Traditional


2,738,832


2,965,187


-7.6




Investment related


286,533


320,274


-10.5




Total


3,025,365


3,285,461


-7.9


 

There are two main reasons for the performance of the life insurance industry in 2020:

Traditional insurance products: The interest rate on insurance policy liability reserves was lowered twice at the beginning of last year and the middle of the year. Consequently, the interest rate on variable-interest insurance policies was lower, and the buying momentum of traditional insurance policies was weaker.

Investment insurance products: In addition to the impact of the COVID-19 pandemic, the Insurance Bureau has issued new measures for investment-type insurance policies. Sales of investment-related insurance products declined as insurers offered lower investment returns after the regulator made it a requirement for target-maturity bond funds to be linked with policies that only invest in bonds with ratings of “BBB” or higher. In addition, such bonds must not exceed 40% of the fund’s net value at most, so that the income of the fund linked to the insurance policy decreases, which affects the performance of investment insurance policies.


 

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