Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017

Transcription

1 Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Market Intelligence Report Reference code: IS0481MR Published: January Timetric John Carpenter House 7 Carmelite Street London EC4Y 0BS UK Tel: +44 (0) Fax: +44 (0)

2 EXECUTIVE SUMMARY 1 Executive Summary The size and significance of the Taiwanese non-life segment is relatively small compared with other Asian countries such as Japan and Hong Kong. The Taiwanese non-life segment s penetration stood at 0.75% in 2012, compared with Japan with 1.5% and Hong Kong with 0.9%, indicatign that there is a large potential customer base in the country. Furthermore, Taiwan is one of the best performing economies in the East Asian region. Growing exports to key Asian countries such as Singapore, Malaysia, Indonesia, Thailand, Vietnam and the Philippines have contributed to economic growth. In 2012, the total exports to these countries valued US$56.1 billion, or approximately 19.0% of total Taiwanese exports. The continued growth in exports and the export-driven economy generated business for the general liability category during the review period. As such, the general liability category grew at the fastest CAGR of 8.5% in the non-life segment during the review period. This, combined with growth in motor insurance, drove the total growth of the non-life segment during the review period. As such, the written premium of the segment increased from TWN96.7 billion (US$3.1 billion) in 2008 to TWN105.5 billion (US$3.6 billion) in 2012, at a CAGR of 2.2% during the review period. FSC intervention keeps insurance demand intact The FSC, which controls and fixes the compulsory automobile liability insurance premium rates, has reduced premium rates consistently. In 2011, the automobile and motor liability premium rates were reduced by 4.3% from the previous year, while death and injuries benefits were increased from TWN1.6 million to TWN2.0 million in In January 2012, the basic protection under residential earthquake insurance was raised from TWN1.2 million to TWN1.5 million, while the premium rate remained untouched. Such steps by the regulator demand for insurance buoyant. Large-scale infrastructure development projects to spur demand for insurance To spur economic growth and meet international competition, the Taiwanese government adopted the i-taiwan Projects scheme to develop infrastructure projects. These include 12 projects including harbor construction, transportation, urban renewal and environmental protection facilities. The total investment in these projects is estimated to be approximately TWN4.0 trillion over the period These projects are being financed through public and private partnerships the government is expected to spend TWN2.65 trillion, while private participants are to invest TWN1.3 trillion. These massive infrastructure projects will require high-value property insurance cover, and are likely to generate substantial business for various lines of insurance, such as property, transit and general liability, over the forecast period. Establishment of cross-strait trade services to strengthen the Taiwanese insurance industry In June 2011, Mainland China and Taiwan entered into the Cross-strait Trade in Services Agreement to promote trade between the two countries. The agreement enables Taiwanese insurers to expand into Mainland China with few regulatory hurdles, and vice-versa. It also encourages multinationals operating in Taiwan to access Mainland China, provided they have been fully operational and paid local taxes in Taiwan for five consecutive years. This step has already had a positive impact, as nine insurers from Taiwan made strategic equity investments, while 11 domestic insurers established representative offices in Mainland China in Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 2

3 TABLE OF CONTENTS 1 Executive Summary Introduction What is This Report About? Definitions Methodology Regional Market Dynamics Overview Market Trends Market Size Non-Life Insurance Segment Regional Benchmarking Scale and Penetration Total segment gross written premium Premium per capita Non-life insurance penetration as a percentage of GDP Growth Gross written premium Gross written premium per capita Efficiency and Risk Loss ratio Combined ratio Incurred losses per capita Incurred losses as a share of GDP Taiwanese Insurance Industry Attractiveness Insurance Industry Size, Key Industry Trends and Drivers Business drivers Non-Life Insurance Outlook Non-Life Insurance Growth Prospects by Category Property insurance Fire and allied perils insurance Engineering insurance Other property insurance Motor Insurance Motor hull insurance Motor third-party insurance General Third-Party Insurance Marine, Aviation and Transit Insurance Marine insurance Aviation insurance Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 3

4 6.4.3 Transit insurance Analysis by Distribution Channels Direct Marketing Bancassurance Agencies E-Commerce Brokers Porter s Five Forces Analysis Taiwanese Non-Life Insurance Market Bargaining Power of Suppliers: Low Bargaining Power of Buyers: Medium-to-High Barriers to Entry: High Intensity of Rivalry: Medium Threat of Substitutes: Low Reinsurance Growth Dynamics and Challenges Reinsurance Segment Size, Reinsurance Segment Size by Type of Insurance, Governance, Risk and Compliance Legislation Overview and Historical Evolution Legislation Trends by Type of Insurance Life insurance regulatory trends Property insurance regulatory trends Motor insurance regulatory trends Liability insurance regulatory trends Marine, aviation, and transit insurance regulatory trends Personal accident insurance regulatory trends Health insurance regulatory trends Compulsory Insurance Automobile liability insurance policy Supervision and Control International Association of Insurance Supervisors (IAIS) Insurance Bureau Non-Admitted Insurance Regulatory Trends Overview Intermediaries Market practices Fines and penalties Company Registration and Operations Types of insurance organization Establishing a local company Foreign ownership Types of license Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 4

5 Capital requirements Solvency margins Reserve requirements Investment regulations Statutory return requirements Taxation Insurance premium or policy taxation Corporate tax VAT Captives Legal System Introduction Access to court Alternative dispute resolution (ADR) Competitive Landscape and Strategic Insights Overview Leading Companies in the Taiwanese Non-Life Insurance Segment Comparison of the Top-Five Insurers Gross Claims Loss Ratio Total assets Fubon Insurance Company Ltd Company Overview Fubon Insurance Company Ltd key facts Fubon Insurance Company Ltd key financials Cathay Century Insurance Co., Ltd Company Overview Cathay Century Insurance Co., Ltd key facts Cathay Century Insurance Co., Ltd key financials Shinkong Insurance Co., Ltd Company Overview Shinkong Insurance Co., Ltd key facts Shinkong Insurance Co., Ltd key financials Tokio Marine Newa Insurance Co. Ltd Company Overview Tokio Marine Newa Insurance Co. Ltd key facts Tokio Marine Newa Insurance Co. Ltd key financials South China Insurance Company, Ltd Company Overview South China Insurance Company, Ltd key facts South China Insurance Company, Ltd key financials Taian Insurance Company, Ltd Company Overview Taian Insurance Company, Ltd key facts Taian Insurance Company, Ltd key financials Union Insurance Company, Ltd Company Overview Union Insurance Company, Ltd key facts Union Insurance Company, Ltd key financials Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 5

6 11.11 Chung Kuo Insurance Company, Ltd Company Overview Chung Kuo Insurance Company, Ltd key facts Chung Kuo Insurance Company, Ltd key financials The First Insurance Co., Ltd Company Overview The First Insurance Co., Ltd key facts The First Insurance Co., Ltd key financials Business Environment and Country Risk Business Confidence Market capitalization trend Taiwan Stock Exchange Corp. (TWSE) Economic Performance GDP at constant prices (US$) GDP per capita at constant prices (US$) GDP at current prices (US$) GDP per capita at current prices (US$) GDP by key segments Agriculture, hunting, forestry and fishing net output at current prices (US$) Agriculture, hunting, forestry and fishing net output at current prices, as a percentage of GDP Manufacturing net output at current prices (US$) Manufacturing net output at current prices as a percentage of GDP Mining, manufacturing and utilities at current prices (US$) Mining, manufacturing and utilities at current prices as a percentage of GDP Construction net output at current prices (US$) Construction net output at current prices as a percentage of GDP Inflation rate Exports as a percentage of GDP Imports as a percentage of GDP Exports growth Imports growth Annual average exchange rate US$ TWN Labor Force Labor force Unemployment rate Demographics Household consumption expenditure (US$) Total population Age distribution of the total population Appendix Methodology Contact Timetric About Timetric Timetric s Services Disclaimer Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 6

7 LIST OF FIGURES Figure 1: Southeast Asia Economies and Populations, Figure 2: Southeast Asia Growth Trends in the Insurance Industry Figure 3: Southeast Asian Region Total Insurance Industry by Insurance Segment (US$ Billion), Figure 4: Southeast Asian Comparison Non-Life Insurance Segment Gross Written Premium (US$ Billion), Figure 5: Southeast Asian Comparison Non-Life Insurance Premium per Capita (US$), Figure 6: Southeast Asian Comparison Non-Life Insurance Penetration (% of GDP), 2011 and Figure 7: Southeast Asian Comparison Non-Life Insurance Gross Written Premium Growth (%), Figure 8: Southeast Asian Comparison Non-Life Insurance Gross Written Premium per Capita Growth (%), Figure 9: Southeast Asian Comparison Non-Life Insurance Loss Ratio (%), 2011 and Figure 10: Southeast Asian Comparison Non-Life Insurance Combined Ratio (%), 2011 and Figure 11: Southeast Asian Comparison Non-Life Insurance Incurred Losses per Capita (US$), 2011 and Figure 12: Southeast Asian Comparison Non-Life Insurance Incurred Losses per GDP (%), 2011 and Figure 13: Taiwanese Insurance Overall Written Premium by Segment (TWN Billion), Figure 14: Taiwanese Insurance Dynamics by Segment (%), Figure 15: Taiwanese Non-Life Insurance Written Premium by Category (TWN Billion), Figure 16: Taiwanese Non-Life Insurance Written Premium by Category (% Share), 2012 and Figure 17: Taiwanese Non-Life Insurance Dynamics by Category (%), Figure 18: Taiwanese Non-Life Insurance Earned Premium (TWN Billion), Figure 19: Taiwanese Non-Life Insurance Earned Premium (TWN Billion), Figure 20: Taiwanese Non-Life Insurance Paid Claims by Category (TWN Billion), Figure 21: Taiwanese Non-Life Insurance Incurred Loss by Category (TWN Billion), Figure 22: Taiwanese Non-Life Insurance Loss Ratio (%), Figure 23: Taiwanese Non-Life Insurance Loss Ratio (%), Figure 24: Taiwanese Non-Life Insurance Commission and Expenses (TWN Billion), Figure 25: Taiwanese Non-Life Insurance Commission and Expenses (TWN Billion), Figure 26: Taiwanese Non-Life Insurance Combined Ratio (%), Figure 27: Taiwanese Non-Life Insurance Combined Ratio (%), Figure 28: Taiwanese Non-Life Insurance Frauds and Crimes (TWN Billion), Figure 29: Taiwanese Non-Life Insurance Frauds and Crimes (TWN Billion), Figure 30: Taiwanese Non-Life Insurance Total Assets (TWN Billion), Figure 31: Taiwanese Non-Life Insurance Total Assets (TWN Billion), Figure 32: Taiwanese Non-Life Insurance Total Investment Income (TWN Billion), Figure 33: Taiwanese Non-Life Insurance Total Investment Income (TWN Billion), Figure 34: Taiwanese Non-Life Insurance Retentions (TWN Billion), Figure 35: Taiwanese Non-Life Insurance Retentions (TWN Billion), Figure 36: Taiwanese Non-Life Insurance Investment Portfolio (TWN Billion), Figure 37: Taiwanese Non-Life Insurance Investment Portfolio (% Share), 2008 and Figure 38: Taiwanese Non-Life Insurance Penetration (%), Figure 39: Taiwanese Non-Life Insurance Number of Policies Sold (Thousand), Figure 40: Taiwanese Non-Life Insurance Number of Policies Sold (Thousand), Figure 41: Taiwanese Non-Life Insurance Premium Per Capita (TWN), Figure 42: Taiwanese Property Insurance Written Premium by Sub-Category (TWN Billion), Figure 43: Taiwanese Property Insurance Dynamics by Sub-Category (%), Figure 44: Taiwanese Property Insurance Loss Ratio (%), Figure 45: Taiwanese Property Insurance Loss Ratio (%), Figure 46: Taiwanese Fire and Allied Perils Insurance Number of Policies Sold (Thousand), Figure 47: Taiwanese Fire and Allied Perils Insurance Number of Policies Sold (Thousand), Figure 48: Taiwanese Fire and Allied Perils Insurance Written Premium (TWN Billion), Figure 49: Taiwanese Fire and Allied Perils Insurance Written Premium (TWN Billion), Figure 50: Taiwanese Engineering Insurance Number of Policies Sold (Thousand), Figure 51: Taiwanese Engineering Insurance Number of Policies Sold (Thousand), Figure 52: Taiwanese Engineering Insurance Written Premium (TWN Billion), Figure 53: Taiwanese Engineering Insurance Written Premium (TWN Billion), Figure 54: Taiwanese Other Property Insurance Number of Policies Sold (Thousand), Figure 55: Taiwanese Other Property Insurance Number of Policies Sold (Thousand), Figure 56: Taiwanese Other Property Insurance Written Premium (TWN Billion), Figure 57: Taiwanese Other Property Insurance Written Premium (TWN Billion), Figure 58: Taiwanese Motor Insurance Written Premium by Sub-Category (TWN Billion), Figure 59: Taiwanese Motor Insurance Dynamics by Sub-Category, Figure 60: Taiwanese Motor Insurance Loss Ratio (%), Figure 61: Taiwanese Motor Insurance Loss Ratio (%), Figure 62: Taiwanese Motor Hull Insurance Number of Policies Sold (Thousand), Figure 63: Taiwanese Motor Hull Insurance Number of Policies Sold (Thousand), Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 7

8 Figure 64: Taiwanese Motor Hull Insurance Written Premium (TWN Billion), Figure 65: Taiwanese Motor Hull Insurance Written Premium (TWN Billion), Figure 66: Taiwanese Motor Third-Party Insurance Number of Policies Sold (Thousand), Figure 67: Taiwanese Motor Third-Party Insurance Number of Policies Sold (Thousand), Figure 68: Taiwanese Motor Third-Party Insurance Written Premium (TWN Billion), Figure 69: Taiwanese Motor Third-Party Insurance Written Premium (TWN Billion), Figure 70: Taiwanese General Third-Party Insurance Number of Policies Sold (Thousand), Figure 71: Taiwanese General Third-Party Insurance Number of Policies Sold (Thousand), Figure 72: Taiwanese General Third-Party Insurance Written Premium (TWN Billion), Figure 73: Taiwanese General Third-Party Insurance Written Premium (TWN Billion), Figure 74: Taiwanese General Third-Party Insurance Loss Ratio (%), Figure 75: Taiwanese General Third-Party Insurance Loss Ratio (%), Figure 76: Taiwanese Marine, Aviation and Transit Insurance Written Premium by Sub-Category (TWN Billion), Figure 77: Taiwanese Marine, Aviation and Transit Insurance Dynamics by Sub-Category (%), Figure 78: Taiwanese Marine, Aviation and Transit Insurance Loss Ratio (%), Figure 79: Taiwanese Marine, Aviation and Transit Insurance Loss Ratio (%), Figure 80: Taiwanese Marine Insurance Number of Policies Sold (Thousand), Figure 81: Taiwanese Marine Insurance Number of Policies Sold (Thousand), Figure 82: Taiwanese Marine Insurance Written Premium (TWN Billion), Figure 83: Taiwanese Marine Insurance Written Premium (TWN Billion), Figure 84: Taiwanese Aviation Insurance Number of Policies Sold (Thousand), Figure 85: Taiwanese Aviation Insurance Number of Policies Sold (Thousand), Figure 86: Taiwanese Aviation Insurance Written Premium (TWN Billion), Figure 87: Taiwanese Aviation Insurance Written Premium (TWN Billion), Figure 88: Taiwanese Transit Insurance Number of Policies Sold (Thousand), Figure 89: Taiwanese Transit Insurance Number of Policies Sold (Thousand), Figure 90: Taiwanese Transit Insurance Written Premium (TWN Billion), Figure 91: Taiwanese Transit Insurance Written Premium (TWN Billion), Figure 92: Taiwanese Non-Life Insurance Written Premium by Distribution Channel (% Share), 2012 and Figure 93: Taiwanese Non-Life Insurance Direct Marketing Commission Paid (TWN Billion), Figure 94: Taiwanese Non-Life Insurance Direct Marketing Commission Paid (TWN Billion), Figure 95: Taiwanese Non-Life Insurance Written Premium Through Direct Marketing (TWN Billion), Figure 96: Taiwanese Non-Life Insurance Written Premium Through Direct Marketing (TWN Billion), Figure 97: Taiwanese Non-Life Insurance Policies Sold Through Direct Marketing (Thousand), Figure 98: Taiwanese Non-Life Insurance Policies Sold Through Direct Marketing (Thousand), Figure 99: Taiwanese Non-Life Insurance Number of Direct Marketing Distributors, Figure 100: Taiwanese Non-Life Insurance Number of Direct Marketing Distributors, Figure 101: Taiwanese Non-Life Insurance Bancassurance Commission Paid (TWN Billion), Figure 102: Taiwanese Non-Life Insurance Bancassurance Commission Paid (TWN Billion), Figure 103: Taiwanese Non-Life Insurance Written Premium Through Bancassurance (TWN Billion), Figure 104: Taiwanese Non-Life Insurance Written Premium Through Bancassurance (TWN Billion), Figure 105: Taiwanese Non-Life Insurance Policies Sold Through Bancassurance (Thousand), Figure 106: Taiwanese Non-Life Insurance Policies Sold Through Bancassurance (Thousand), Figure 107: Taiwanese Non-Life Insurance Number of Bancassurance Distributors, Figure 108: Taiwanese Non-Life Insurance Number of Bancassurance Distributors, Figure 109: Taiwanese Non-Life Insurance Commission Paid to Agencies (TWN Billion), Figure 110: Taiwanese Non-Life Insurance Commission Paid to Agencies (TWN Billion), Figure 111: Taiwanese Non-Life Insurance Written Premium Through Agencies (TWN Billion), Figure 112: Taiwanese Non-Life Insurance Written Premium Through Agencies (TWN Billion), Figure 113: Taiwanese Non-Life Insurance Policies Sold Through Agencies (Thousand), Figure 114: Taiwanese Non-Life Insurance Policies Sold Through Agencies (Thousand), Figure 115: Taiwanese Non-Life Insurance Number of Agencies, Figure 116: Taiwanese Non-Life Insurance Number of Agencies, Figure 117: Taiwanese Non-Life Insurance E-Commerce Commission Paid (TWN Billion), Figure 118: Taiwanese Non-Life Insurance E-Commerce Commission Paid (TWN Billion), Figure 119: Taiwanese Non-Life Insurance Written Premium Through E-Commerce (TWN Million), Figure 120: Taiwanese Non-Life Insurance Written Premium Through E-Commerce (TWN Million), Figure 121: Taiwanese Non-Life Insurance Policies Sold Through E-Commerce (Thousand), Figure 122: Taiwanese Non-Life Insurance Policies Sold Through E-Commerce (Thousand), Figure 123: Taiwanese Non-Life Insurance Number of E-Commerce Distributors, Figure 124: Taiwanese Non-Life Insurance Number of E-Commerce Distributors, Figure 125: Taiwanese Non-Life Insurance Commission Paid to Brokers (TWN Billion), Figure 126: Taiwanese Non-Life Insurance Commission Paid to Brokers (TWN Billion), Figure 127: Taiwanese Non-Life Insurance Written Premium Through Brokers (TWN Billion), Figure 128: Taiwanese Non-Life Insurance Written Premium Through Brokers (TWN Billion), Figure 129: Taiwanese Non-Life Insurance Policies Sold Through Brokers (Thousand), Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 8

9 Figure 130: Taiwanese Non-Life Insurance Policies Sold Through Brokers (Thousand), Figure 131: Taiwanese Non-Life Insurance Number of Brokers, Figure 132: Taiwanese Non-Life Insurance Number of Brokers, Figure 133: Taiwanese Non-Life Insurance Five Forces Analysis Figure 134: Taiwanese Premium Ceded to Reinsurance by Category (TWN Billion), Figure 135: Taiwanese Premium Ceded to Reinsurance by Category (% Share), 2012 and Figure 136: Taiwanese Reinsurance Dynamics by Category (%), Figure 137: Taiwanese Premium Ceded to Reinsurance by Type of Insurance (TWN Billion), Figure 138: Taiwanese Reinsurance Dynamics by Type of Insurance (%), Figure 139: Taiwanese Non-Life Insurance Percentage of Reinsurance Ceded, Figure 140: Taiwanese Non-Life Insurance Percentage of Reinsurance Ceded, Figure 141: Taiwan The Insurance Regulatory Framework Figure 142: Taiwan Insurance Supervision and Control at Various Levels Figure 143: Taiwan Insurance Regulatory Frameworks for Company Registration and Operation Figure 144: Number of Insurance Companies in Taiwanese Non-Life Insurance Segment Figure 145: Shares of Key Insurers in the Taiwanese Non-Life Insurance Segment (%), Figure 146: Gross Claims Top Five Taiwanese Non-Life Insurers, Figure 147: Loss Ratio Top Five Taiwanese Non-Life Insurers, Figure 148: Total Assets Top-Five Taiwan Non-Life Insurers, Figure 149: Taiwanese Stock Exchange Market Capitalization (US$ Billion), Figure 150: Taiwanese GDP at Constant Prices (US$ Billion), Figure 151: Taiwanese GDP Per Capita at Constant Prices (US$), Figure 152: Taiwanese GDP at Current Prices (US$ Billion), Figure 153: Taiwanese GDP Per Capita at Current Prices (US$), Figure 154: Taiwanese GDP by Key Segments (%) 2007 and Figure 155: Taiwanese Agriculture, Hunting, Forestry and Fishing Net Output at Current Prices (US$ Billion), Figure 156: Taiwanese Agriculture, Hunting, Forestry and Fishing Net Output at Current Prices, as a Percentage of GDP (%), Figure 157: Taiwanese Manufacturing Net Output at Current Prices (US$ Billion), Figure 158: Taiwanese Manufacturing Net Output at Current Prices as a Percentage of GDP (%), Figure 159: Taiwanese Mining, Manufacturing and Utilities Net Output at Current Prices (US$ Billion), Figure 160: Taiwanese Mining, Manufacturing and Utilities Net Output at Current Prices, as a Percentage of GDP (%), Figure 161: Taiwanese Construction Net Output at Current Prices (US$ Billion), Figure 162: Taiwanese Construction Output at Current Prices as a Percentage of GDP (%), Figure 163: Taiwanese Inflation Rate (%), Figure 164: Taiwanese Exports as a Percentage of GDP (%), Figure 165: Taiwanese Imports as a Percentage of GDP (%), Figure 166: Taiwanese Exports Growth (%), Figure 167: Taiwanese Imports Growth (%), Figure 168: Taiwanese Annual Average Exchange Rate US$ TWN, Figure 169: Taiwanese Size of Labor Force (Million), Figure 170: Taiwanese Unemployment Rate (%), Figure 171: Taiwanese Household Consumption Expenditure (US$ Billion), Figure 172: Taiwanese Total Population (Million), Figure 173: Taiwanese Population Distribution by Age (%), Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 9

10 LIST OF TABLES Table 1: Insurance Industry Definitions Table 2: Southeast Asia Life Expectancy, 2000 and Table 3: Taiwanese Insurance Overall Written Premium by Segment (TWN Billion), Table 4: Taiwanese Insurance Overall Written Premium by Segment (US$ Billion), Table 5: Taiwanese Insurance Overall Written Premium by Segment (TWN Billion), Table 6: Taiwanese Insurance Overall Written Premium by Segment (US$ Billion), Table 7: Taiwanese Insurance Segmentation (% Share), Table 8: Taiwanese Non-Life Insurance Written Premium by Category (TWN Billion), Table 9: Taiwanese Non-Life Insurance Written Premium by Category (US$ Billion), Table 10: Taiwanese Non-Life Insurance Written Premium by Category (TWN Billion), Table 11: Taiwanese Non-Life Insurance Written Premium by Category (US$ Billion), Table 12: Taiwanese Non-Life Insurance Earned Premium (TWN Billion), Table 13: Taiwanese Non-Life Insurance Earned Premium (TWN Billion), Table 14: Taiwanese Non-Life Insurance Paid Claims by Category (TWN Billion), Table 15: Taiwanese Non-Life Insurance Paid Claims by Category (US$ Billion), Table 16: Taiwanese Non-Life Insurance Paid Claims by Category (TWN Billion), Table 17: Taiwanese Non-Life Insurance Paid Claims by Category (US$ Billion), Table 18: Taiwanese Non-Life Insurance Incurred Loss by Category (TWN Billion), Table 19: Taiwanese Non-Life Insurance Incurred Loss by Category (US$ Billion), Table 20: Taiwanese Non-Life Insurance Incurred Loss by Category (TWN Billion), Table 21: Taiwanese Non-Life Insurance Incurred Loss by Category (US$ Billion), Table 22: Taiwanese Non-Life Insurance Loss Ratio (%), Table 23: Taiwanese Non-Life Insurance Loss Ratio (%), Table 24: Taiwanese Non-Life Insurance Commission and Expenses (TWN Billion), Table 25: Taiwanese Non-Life Insurance Commission and Expenses (TWN Billion), Table 26: Taiwanese Non-Life Insurance Combined Ratio (%), Table 27: Taiwanese Non-Life Insurance Combined Ratio (%), Table 28: Taiwanese Non-Life Insurance Frauds and Crimes (TWN Billion), Table 29: Taiwanese Non-Life Insurance Frauds and Crimes (TWN Billion), Table 30: Taiwanese Non-Life Insurance Total Assets (TWN Billion), Table 31: Taiwanese Non-Life Insurance Total Assets (TWN Billion), Table 32: Taiwanese Non-Life Insurance Total Investment Income (TWN Billion), Table 33: Taiwanese Non-Life Insurance Total Investment Income (TWN Billion), Table 34: Taiwanese Non-Life Insurance Retentions (TWN Billion), Table 35: Taiwanese Non-Life Insurance Retentions (TWN Billion), Table 36: Taiwanese Property Insurance Written Premium by Sub-Category (TWN Billion), Table 37: Taiwanese Property Insurance Written Premium by Sub-Category (US$ Billion), Table 38: Taiwanese Property Insurance Written Premium by Sub-Category (TWN Billion), Table 39: Taiwanese Property Insurance Written Premium by Sub-Category (US$ Billion), Table 40: Taiwanese Property Insurance Loss Ratio (%), Table 41: Taiwanese Property Insurance Loss Ratio (%), Table 42: Taiwanese Fire and Allied Perils Insurance Number of Policies Sold (Thousand), Table 43: Taiwanese Fire and Allied Perils Insurance Number of Policies Sold (Thousand), Table 44: Taiwanese Fire and Allied Perils Insurance Written Premium (TWN Billion), Table 45: Taiwanese Fire and Allied Perils Insurance Written Premium (TWN Billion), Table 46: Taiwanese Engineering Insurance Number of Policies Sold (Thousand), Table 47: Taiwanese Engineering Insurance Number of Policies Sold (Thousand), Table 48: Taiwanese Engineering Insurance Written Premium (TWN Billion), Table 49: Taiwanese Engineering Insurance Written Premium (TWN Billion), Table 50: Taiwanese Other Property Insurance Number of Policies Sold (Thousand), Table 51: Taiwanese Other Property Insurance Number of Policies Sold (Thousand), Table 52: Taiwanese Other Property Insurance Written Premium (TWN Billion), Table 53: Taiwanese Other Property Insurance Written Premium (TWN Billion), Table 54: Taiwanese Motor Insurance Written Premium by Sub-Category (TWN Billion), Table 55: Taiwanese Motor Insurance Written Premium by Sub-Category (US$ Billion), Table 56: Taiwanese Motor Insurance Written Premium by Sub-Category (TWN Billion), Table 57: Taiwanese Motor Insurance Written Premium by Sub-Category (US$ Billion), Table 58: Taiwanese Motor Insurance Loss Ratio (%), Table 59: Taiwanese Motor Insurance Loss Ratio (%), Table 60: Taiwanese Motor Hull Insurance Number of Policies Sold (Thousand), Table 61: Taiwanese Motor Hull Insurance Number of Policies Sold (Thousand), Table 62: Taiwanese Motor Hull Insurance Written Premium (TWN Billion), Table 63: Taiwanese Motor Hull Insurance Written Premium (TWN Billion), Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 10

11 Table 64: Taiwanese Motor Third-Party Insurance Number of Policies Sold (Thousand), Table 65: Taiwanese Motor Third-Party Insurance Number of Policies Sold (Thousand), Table 66: Taiwanese Motor Third-Party Insurance Written Premium (TWN Billion), Table 67: Taiwanese Motor Third-Party Insurance Written Premium (TWN Billion), Table 68: Taiwanese General Third-Party Insurance Number of Policies Sold (Thousand), Table 69: Taiwanese General Third-Party Insurance Number of Policies Sold (Thousand), Table 70: Taiwanese General Third-Party Insurance Written Premium (TWN Billion), Table 71: Taiwanese General Third-Party Insurance Written Premium (TWN Billion), Table 72: Taiwanese General Third-Party Insurance Loss Ratio (%), Table 73: Taiwanese General Third-Party Insurance Loss Ratio (%), Table 74: Taiwanese Marine, Aviation and Transit Insurance Written Premium by Sub-Category (TWN Billion), Table 75: Taiwanese Marine, Aviation and Transit Insurance Written Premium by Sub-Category (US$ Billion), Table 76: Taiwanese Marine, Aviation and Transit Insurance Written Premium by Sub-Category (TWN Billion), Table 77: Taiwanese Marine, Aviation and Transit Insurance Written Premium by Sub-Category (US$ Billion), Table 78: Taiwanese Marine, Aviation and Transit Insurance Loss Ratio (%), Table 79: Taiwanese Marine, Aviation and Transit Insurance Loss Ratio (%), Table 80: Taiwanese Marine Insurance Number of Policies Sold (Thousand), Table 81: Taiwanese Marine Insurance Number of Policies Sold (Thousand), Table 82: Taiwanese Marine Insurance Written Premium (TWN Billion), Table 83: Taiwanese Marine Insurance Written Premium (TWN Billion), Table 84: Taiwanese Aviation Insurance Number of Policies Sold (Thousand), Table 85: Taiwanese Aviation Insurance Number of Policies Sold (Thousand), Table 86: Taiwanese Aviation Insurance Written Premium (TWN Billion), Table 87: Taiwanese Aviation Insurance Written Premium (TWN Billion), Table 88: Taiwanese Transit Insurance Number of Policies Sold (Thousand), Table 89: Taiwanese Transit Insurance Number of Policies Sold (Thousand), Table 90: Taiwanese Transit Insurance Written Premium (TWN Billion), Table 91: Taiwanese Transit Insurance Written Premium (TWN Billion), Table 92: Taiwanese Non-Life Insurance Direct Marketing Commission Paid (TWN Billion), Table 93: Taiwanese Non-Life Insurance Direct Marketing Commission Paid (TWN Billion), Table 94: Taiwanese Non-Life Insurance Written Premium Through Direct Marketing (TWN Billion), Table 95: Taiwanese Non-Life Insurance Written Premium Through Direct Marketing (TWN Billion), Table 96: Taiwanese Non-Life Insurance Policies Sold Through Direct Marketing (Thousand), Table 97: Taiwanese Non-Life Insurance Policies Sold Through Direct Marketing (Thousand), Table 98: Taiwanese Non-Life Insurance Number of Direct Marketing Distributors, Table 99: Taiwanese Non-Life Insurance Number of Direct Marketing Distributors, Table 100: Taiwanese Non-Life Insurance Bancassurance Commission Paid (TWN Billion), Table 101: Taiwanese Non-Life Insurance Bancassurance Commission Paid (TWN Billion), Table 102: Taiwanese Non-Life Insurance Written Premium Through Bancassurance (TWN Billion), Table 103: Taiwanese Non-Life Insurance Written Premium Through Bancassurance (TWN Billion), Table 104: Taiwanese Non-Life Insurance Policies Sold Through Bancassurance (Thousand), Table 105: Taiwanese Non-Life Insurance Policies Sold Through Bancassurance (Thousand), Table 106: Taiwanese Non-Life Insurance Number of Bancassurance Distributors, Table 107: Taiwanese Non-Life Insurance Number of Bancassurance Distributors, Table 108: Taiwanese Non-Life Insurance Commission Paid to Agencies (TWN Billion), Table 109: Taiwanese Non-Life Insurance Commission Paid to Agencies (TWN Billion), Table 110: Taiwanese Non-Life Insurance Written Premium Through Agencies (TWN Billion), Table 111: Taiwanese Non-Life Insurance Written Premium Through Agencies (TWN Billion), Table 112: Taiwanese Non-Life Insurance Policies Sold Through Agencies (Thousand), Table 113: Taiwanese Non-Life Insurance Policies Sold Through Agencies (Thousand), Table 114: Taiwanese Non-Life Insurance Number of Agencies, Table 115: Taiwanese Non-Life Insurance Number of Agencies, Table 116: Taiwanese Non-Life Insurance E-Commerce Commission Paid (TWN Billion), Table 117: Taiwanese Non-Life Insurance E-Commerce Commission Paid (TWN Billion), Table 118: Taiwanese Non-Life Insurance Written Premium Through E-Commerce (TWN Million), Table 119: Taiwanese Non-Life Insurance Written Premium Through E-Commerce (TWN Million), Table 120: Taiwanese Non-Life Insurance Policies Sold Through E-Commerce (Thousand), Table 121: Taiwanese Non-Life Insurance Policies Sold Through E-Commerce (Thousand), Table 122: Taiwanese Non-Life Insurance Number of E-Commerce Distributors, Table 123: Taiwanese Non-Life Insurance Number of E-Commerce Distributors, Table 124: Taiwanese Non-Life Insurance Commission Paid to Brokers (TWN Billion), Table 125: Taiwanese Non-Life Insurance Commission Paid to Brokers (TWN Billion), Table 126: Taiwanese Non-Life Insurance Written Premium Through Brokers (TWN Billion), Table 127: Taiwanese Non-Life Insurance Written Premium Through Brokers (TWN Billion), Table 128: Taiwanese Non-Life Insurance Policies Sold Through Brokers (Thousand), Table 129: Taiwanese Non-Life Insurance Policies Sold Through Brokers (Thousand), Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 11

12 Table 130: Taiwanese Non-Life Insurance Number of Brokers, Table 131: Taiwanese Non-Life Insurance Number of Brokers, Table 132: Reinsurance in Taiwanese by Category (TWN Billion), Table 133: Reinsurance in Taiwanese by Category (US$ Billion), Table 134: Reinsurance in Taiwan by Category (TWN Billion), Table 135: Reinsurance in Taiwan by Category (US$ Billion), Table 136: Taiwanese Premium Ceded to Reinsurance by Type of Insurance (TWN Billion), Table 137: Taiwanese Premium Ceded to Reinsurance by Type of Insurance (US$ Billion), Table 138: Taiwanese Premium Ceded to Reinsurance by Type of Insurance (TWN Billion), Table 139: Taiwanese Premium Ceded to Reinsurance by Type of Insurance (US$ Billion), Table 140: Taiwanese Non-Life Insurance Percentage of Reinsurance Ceded, Table 141: Taiwanese Non-Life Insurance Percentage of Reinsurance Ceded, Table 142: Taiwan Corporate Tax Rates for the Financial Year Table 143: Number of Non-life Insurance Providers in Taiwan, Table 144: Shares of Key Insurers in the Taiwanese Non-Life Insurance Segment (%), Table 145: Fubon Insurance Company Ltd, Key Facts Table 146: Fubon Insurance Company Ltd, Key Financials (TWN Million), Table 147: Cathay Century Insurance Co., Ltd, Key Facts Table 148: Cathay Century Insurance Co., Ltd, Key Financials (TWN Million), Table 149: Shinkong Insurance Co., Ltd, Key Facts Table 150: Shinkong Insurance Co., Ltd, Key Financials (SGD Million), Table 151: Tokio Marine Newa Insurance Co. Ltd, Key Facts Table 152: Tokio Marine Newa Insurance Co. Ltd, Key Financials (TWN Million), Table 153: South China Insurance Company, Ltd, Key Facts Table 154: South China Insurance Company, Ltd, Key Financials (TWN Million), Table 155: Taian Insurance Company, Ltd., Key Facts Table 156: Taian Insurance Company, Ltd, Key Financials (TWN Million), Table 157: Union Insurance Company, Ltd, Key Facts Table 158: Union Insurance Company, Ltd, Key Financials (TWN Million), Table 159: Chung Kuo Insurance Company, Ltd, Key Facts Table 160: Chung Kuo Insurance Company, Ltd, Key Financials (TWN Million), Table 161: The First Insurance Co., Ltd, Key Facts Table 162: The First Insurance Co., Ltd, Key Financials (TWN Million), Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 12

13 INTRODUCTION 2 Introduction 2.1 What is This Report About? This report is the result of extensive research on the non-life insurance segment in Taiwan, covering its dynamics and competitive landscape. It provides insights on the size of and forecast for the total non-life segment, and categories such as property, motor, general liability, and marine, aviation and transit insurance. It also provides details on sub-categories and product types. The report also provides an overview of the leading companies in the non-life segment, along with details of strategic initiatives undertaken. The primary source used for the historical data was Financial Supervisory Commission (FSC). 2.2 Definitions All data is collected in local currency. Conversions into US dollars (US$) of current and forecast data are made at the 2012 average annual conversion rate. Most values are displayed to one decimal place. As such, growth rates may appear inconsistent with absolute values due to rounding. For the purposes of this report, the review period is and the forecast period is The data for the period are actuals, while, the data for 2012 has been estimated. The key insurance industry terms covered in the report are defined below: Table 1: Insurance Industry Definitions Term Ceding company Incurred loss Claim ratio Definition A primary insurer that transfers some of its insurance risk by ceding a proportion of its total written premium through a reinsurance contract. The sum of claims paid by an insurance company, and the change in the provision for outstanding claims, irrespective of whether or not they have been reported. Claims payable as a percentage of premium income. Commission and expenses Comprehensive loss ratio Earned premium Endowment policy Facultative reinsurance Gross claim Gross written premium Group annuity The sum of acquisition cost and administrative cost. Acquisition cost is the percentage of a premium produced, which is retained as compensation by insurance agents and brokers. The ratio of claims incurred to net premium earned. The amount of money considered to have been earned on a policy by an insurer. It is calculated by multiplying the original premium by the percentage of the policy s term, which has expired without a claim being made. A scheme in which the term of the policy is defined for a specified period, such as 15, 25 or 30 years. The insurer pays the claim to the family of the assured in an event of his or her death within the policy's term, or in an event of the assured surviving the policy's term. An arrangement for separate reinsurance for each risk that the primary insurer underwrites. The reinsurer can accept or reject any risk presented by the primary insurer seeking reinsurance. The amount payable by an insurance company before allowances is made for credits that may be due in the form of reinsurance, subrogation or salvage. The total amount of premiums (before deduction of reinsurance costs) customers are required to pay for insurance policies written during the year. A life insurance scheme providing annuities at retirement to a group of people under a single contract. It is usually bought by an employer for the benefit of its employees. Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 13

14 INTRODUCTION Table 1: Insurance Industry Definitions Term Insurance density and penetration Insurance fraud Definition The percentage of total written premium to the country s GDP. Any act committed with the intent to obtain payment from an insurer through fraudulent means. Lapsed policy A policy that is terminated due to non-payment of premium. Loss ratio Liability insurance The ratio of total losses paid out in the form of claims plus adjustment expenses divided by the total earned premium. A type of insurance that covers legal claims by third-parties against the insured. Loss reserve The estimated amount of claims incurred but not yet settled. Maturity claim The payment made to a policyholder at the end of the stipulated term of a term life insurance policy. Per capita premium The ratio of the total written premium to the country s total population. Premium ceded The share of premiums transferred to a reinsurance company by a primary insurer. Single-premium life insurance policy A life insurance scheme in which a lump sum is paid for the policy in return for an assured sum of money in the event of the policyholder s death. Term insurance A life insurance scheme that provides protection for a specified period, usually between five and 20 years. The policy expires without value, if the insured survives the stated period. Treaty reinsurance Direct marketing E-commerce A reinsurance agreement applying to the reinsurance of a class or some classes of business, instead of an individual risk. Direct marketing channels for insurance policies include insurance companies sales forces, telemarketing, postal mail, , call centers and mobile phones. The distribution of insurance policies online through a company or third-party website. Agencies Insurance brokers Bancassurance Other distribution channels Source: Timetric analysis Individuals and corporate agencies that are licensed to sell insurance for one or more specific insurance companies. Individuals or businesses that sell insurance policies, and advise and represent the policyholder. They differ from insurance agents, which act on behalf of an insurance company. The partnership between a bank and an insurance company in which the insurance company uses the bank s sales channel to sell insurance. Other distribution channels include post offices, convenience stores, multi-level marketing, any channel other than agencies, direct marketing, bancassurance and the above-mentioned channels. Timetric Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 14

15 INTRODUCTION 2.3 Methodology All Timetric insurance reports are created by following a comprehensive, four-stage methodology. This includes market study, research, analysis and quality control. 1) Market Study A. Standardization Definitions are specified using recognized industry classifications. The same definition is used for every country. Annual average currency exchange rates are used for the latest completed year. These are then applied across both historical and forecast data to remove exchange rate fluctuations. B. Internal audit Review of in-house databases to gather existing data: Historic market databases and reports Company database C. Trend monitoring Review of the latest insurance companies and industry trends 2) Research A. Sources Collection of the latest market-specific data from a wide variety of industry sources: Government statistics Industry associations Company filings International organizations Insurance regulatory agencies B. Expert opinion Collation of opinion taken from leading insurance industry experts Analysis of third-party opinion and forecasts: Broker reports Media Official government sources C. Data consolidation and verification Consolidation of data and opinion to create historical datasets Creation of models to benchmark data across sectors and regions 3) Analysis A. Market forecasts Feeding forecast data into market models: Macroeconomic indicators Industry-specific drivers Analysis of insurance industry database to identify trends: Latest insurance trends Key drivers of insurance industry Non-Life Insurance in Taiwan, Key Trends and Opportunities to 2017 Page 15