HONG KONG, Oct 20 (Bernama-BUSINESS WIRE) — AM Best is maintaining a negative outlook on Taiwan’s non-life insurance segment, citing increased reinsurance costs and a decline in the investment asset base, as some assets were liquidated to pay pandemic-related claims.
The Best’s Market Segment Report, “Market Segment Outlook: Taiwan Non-Life Insurance”, states that the non-life segment suffered a huge net loss of TWD 173 billion (USD 5.4 billion) in 2022 due to the pandemic, which outstripped the cumulative earnings of the last decade. In addition, insurers needed to sell off investments to pay pandemic-related claims, and saw total investments shrink nearly 20% in 2022. Some non-life insurers continued to see unfavourable claims development and reported net losses in the first quarter of 2023, but the majority had returned to operating profitability as of second-quarter 2023. Insurers also have adopted more conservative investment strategies and de-risked their portfolios. The local stock market has recovered through the first nine months of 2023; however, non-life insurers continue to grapple with the low interest rate environment and volatility in operating results through capital gains and losses.