HONG KONG--(BUSINESS WIRE)--AM Best has revised its outlook on Taiwan’s non-life insurance segment to stable from negative, citing a recovery of capital strength among carriers in 2023 following sizeable pandemic-related losses in the previous year.
Also underpinning the outlook revision, as detailed in the Best’s Market Segment Report, “Market Segment Outlook: Taiwan Non-Life Insurance”, are insurers’ prudent underwriting and investment strategies, along with solid top-line growth in key product lines.
According to the report, the segment’s capital position more than doubled in 2023, driven by substantial capital injections, reserve releases and organic earnings growth. Despite this recovery, capital levels have remained below pre-pandemic figures. The non-life sector also reported improved operating profitability with pre-tax earnings soaring over twofold year over year during the first seven months of 2024.
“Insurers have been reviewing their portfolios and non-renewing or increasing rates for unprofitable business, while passing on some of the increased reinsurance costs to policyholders,” said James Chan, director, analytics, AM Best. “Insurers also have adopted a more proactive approach in offering risk advisory services and implementing loss prevention measures with the goal of reducing the frequency and severity of claims.”
Taiwan’s non-life segment recorded an 11.4% year-over-year increase in direct premiums written in July 2024, a continuation of the strong double-digit growth in 2023. AM Best anticipates that this momentum will remain strong in the short to intermediate term.
Offsetting positive factors in the outlook revision to stable include low net investment yields compared with other markets in the region, and the high exposure in Taiwan to natural catastrophes. Despite higher reinsurance rates, Taiwanese non-life insurers continue to exercise caution in structuring their reinsurance programmes. Retention levels remained largely stable in the past renewal, and catastrophe excess-of-loss limits are adequate to cover the modelled outcomes for high return periods.
To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=346771.
AM Best will participate at the upcoming East Asian Insurance Congress’ (EAIC) Hong Kong Conference, which will take place 24-27 September 2024 at the Hong Kong Convention and Exhibition Center, and will host a reception to celebrate the 25th anniversary of the launch of its Asia-Pacific operations. That event is scheduled 6 p.m. HKT on Wednesday, 25 September 2024, at the Renaissance Hong Kong Harbor View Hotel. For more information about the reception, please visit the event page.
AM Best’s market development team for Asia Pacific also will be exhibiting at and attending the EAIC, including Rob Curtis, CEO & managing director, market development - AM Best Asia-Pacific, Ltd. To arrange a meeting at the conference to learn more about AM Best, its role in the insurance industry and the resources it offers to insurance professionals, including Best’s Credit Ratings, please contact Curtis at robert.curtis@ambest.com.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing 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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