Taiwan’s life insurance sector is pivoting towards the promotion of higher-margin protection-type products in response to the anticipated implementation of the IFRS 17 accounting standard and the local Insurance Capital Standard (TW-ICS) set for 2026, as highlighted in a report by Fitch Ratings. The trend, which saw a 16% year-on-year increase in first-year premiums for accident and health insurance in the first nine months of 2024, is expected to further thrive due to potential US Federal Reserve rate cuts, boosting demand for US dollar-denominated variable-interest life insurance. The profitability of many life insurers has also shown notable improvement in the first half of 2024, supported by better new business margins and favorable stock market returns. Fitch predicts that insurers will likely continue to issue bonds through special purpose vehicles to bolster their capital in preparation for stricter regulatory capital requirements ahead.
