KUALA LUMPUR, Aug 25 (NNN-Bernama) — Global credit rating agency, AM Best has revised its market segment outlook on Taiwan’s non-life insurance segment to ‘negative’ from ‘stable’, citing that the resurgence of COVID-19 cases has led to significant losses in pandemic-related insurance policies.
In its “Market Segment Outlook: Taiwan Non-Life Insurance,” AM Best noted that impacts on companies vary, depending on their pandemic insurance exposures and policy expiration patterns.
“AM Best expects that the total claims from the pandemic policies will continue to rise and put material pressure on the non-life segment’s underwriting performance for full-year 2022.
“However, over the intermediate term, insurers that were less impacted are likely to recoup such losses from their non-pandemic-related traditional underwriting portfolios, which have a track record of favourable technical results,” said associate director, James Chan in a statement Thursday.
The prolonged low-interest rate environment in Taiwan, as well as heightened capital market volatility during the first half of 2022 (1H2022), also continued to challenge non-life insurers.
Its stock market index declined by nearly 20 per cent in 1H2022, creating volatility in carriers’ capitalisation and operating results through capital gains and losses.
Moving forward, AM Best expects the market to maintain its focus on profitability and achieve operating margins for non-pandemic lines of business in 2022, similar to levels prior to the surge of COVID-19 infections.
— NNN-BERNAMA
