The non-life insurance sector in Taiwan posted a 10.5% increase in direct written premiums in 2024, reaching NT$278.5 billion (US$9.2 billion), according to a recent market segment report from AM Best.
The report, titled “Taiwan Non-Life Segment’s Operating Performance Supported by Tighter Underwriting Guidelines,” also noted that the industry's capital and surplus grew past NT$150 billion.
Motor insurance remains a primary source of revenue, especially voluntary motor policies, which accounted for nearly half of all direct written premiums. The overall pace of growth slowed slightly, in part due to weaker new vehicle sales in 2024 and early 2025.
To support the growing electric vehicle (EV) market, regulators in Taiwan introduced standardised policy language for EV motor insurance in the second half of 2024. Despite this, insurers are proceeding cautiously.
James Chan, director at AM Best, said firms are still in the data-gathering phase, which is important for developing accurate pricing models for EV coverage.
The report pointed to profitability improvements in 2023 and 2024 following a challenging 2022.
The release of reserves tied to pandemic-era products, along with new underwriting practices, contributed to the positive shift.
Chan said companies have adopted strategies such as withdrawing from underperforming policies, increasing rates, adjusting deductibles, and raising co-insurance requirements.
“These measures are aimed at passing on part of the rising reinsurance costs and potential future losses to policyholders. Insurers also have adopted a more proactive approach in offering risk advisory services and implementing loss prevention measures,” he said.
Among the eight AM Best-rated non-life insurers in Taiwan, combined gross written premiums climbed 10.6% to NT$192.8 billion – mirroring growth among all 14 domestic providers. Travel and commercial lines, in addition to voluntary motor, supported this increase.
Meanwhile, Fitch Ratings maintained its neutral outlook for the broader Asia-Pacific insurance sector in 2025, citing stable capital positions and earnings across most markets, despite macroeconomic uncertainties and shifting regulatory environments.
Life insurers in the region are reportedly adopting more conservative investment portfolios to protect profitability, while general insurers are focused on cost containment and process efficiency.
However, Fitch downgraded the outlook for the life segments in both China and Taiwan from neutral to deteriorating, citing increased headwinds.
In China, the shift in outlook is driven by a combination of slower economic momentum, evolving product offerings, and adjustments to distribution models.
Regulatory changes affecting commissions and a declining agent base are compounding the pressure.
Higher exposure to domestic equities – aligned with policy guidance – is also adding investment risk.
Taiwanese life insurers are facing valuation strain from currency mismatch issues. The strengthening of the New Taiwan dollar in May widened the imbalance between US dollar-denominated assets and local currency liabilities.
Investment income may remain under pressure in the near term across APAC markets, yet Fitch maintains that insurers have sufficient capital reserves to manage volatility.
In Japan, capital buffers are expected to remain intact despite higher domestic interest rates, due to book-value-based valuation standards.
The industry is also preparing for evolving solvency frameworks, with several insurers actively raising capital. While rate increases may support general insurance earnings, rising reinsurance costs and climate-related exposures remain key concerns.
