Taiwan"s Non-Life Insurance Outlook Stabilizes After Pandemic Losses

AM Best has revised its outlook on Taiwan's non-life insurance segment to stable from negative, reflecting a recovery in capital strength among insurers in 2023 after significant pandemic-related losses. The report highlights that the capital position of the segment more than doubled, driven by capital injections, reserve releases, and organic earnings growth, although levels remain below pre-pandemic figures. Insurers have improved their operating profitability, with pre-tax earnings more than doubling year over year in the first seven months of 2024. The non-life insurance sector has adopted prudent underwriting and investment strategies, leading to an 11.4% increase in direct premiums written in July 2024. This growth follows a strong double-digit increase in 2023, indicating a positive trend in the market. Insurers are also reassessing their portfolios, opting to non-renew or increase rates for unprofitable business, while passing some reinsurance costs to policyholders. In response to the changing market conditions, insurers are proactively offering risk advisory services and implementing loss prevention measures to mitigate claims frequency and severity. Despite the challenges posed by higher reinsurance rates, retention levels have remained stable, and catastrophe excess-of-loss limits are deemed adequate for high return periods. AM Best will participate in the upcoming East Asian Insurance Congress in Hong Kong, showcasing its role in the insurance industry and celebrating its 25th anniversary in the Asia-Pacific region. The event will provide opportunities for networking and discussions on the future of the insurance market in the region.