Nanshan Life Insurance is forecasting a resurgence in the industry, buoyed by expectations of the US Federal Reserve ceasing its interest rate hikes and the recent lifting of a four-year prohibition on selling investment-linked products.
In an interview with Bloomberg, Yin Chung-yao, Nanshan Life's chairman, indicated optimism for the sector, citing potential rate cuts by the Fed, anticipated in the first half of the year, as a positive influence on insurance sales. The end of the restriction on investment-linked products is also expected to enhance Nanshan Life's product range and market share, according to Yin.
Taiwan's life insurance industry experienced a significant downturn, with a 21% decline in premium income in 2022 and a further 6.3% decrease in the first eleven months of 2023. Industry analysts attribute this to high interest rates and stricter insurance regulations.
Nanshan Life itself saw a 30% drop in preliminary profit last year, alongside a 7% reduction in new premium income. The company is now considering investments in US corporate bonds to capitalize on wider spreads and increased issuance.
The company is also exploring options to bolster its capital, including a potential initial public offering, though a specific timetable has not been set, Yin said.
Yin also acknowledged the challenges posed by Taiwan's new regulatory framework but expressed belief in its long-term benefits for industry stability.
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