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$2,241bn last year, an increase of 2.5% from 2019.
A summary of the life insurance sector’s premium income last year is as follows:
2020 Premiums NT$m
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.