Taipei City Report Overview of The Insurance Market of Taiwan Mr. Luke Hsu, Vice President Taiwan Insurance Institute May 7th, 2018
2 AGENDA I. Overview of Taiwan s Economy II. Overview of Taiwan s Insurance Market III. Key Developments of Taiwan Insurance Market
3 I. Taiwan s Economy USD, Billions 700.0 600.0 500.0 400.0 300.0 200.0 100.0 - Nominal GDP & Economic Growth Rate 530.5 525.6 530.5 573.2 4.02 2.86 1.41 0.81 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Nominal GDP Economic Growth Rate % 12.00 10.00 8.00 6.00 4.00 2.00 - (2.00) (4.00) Source: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan https://www.dgbas.gov.tw/
4 I. Taiwan s Economy % CPI Growth Rate 4.0% 3.5% 3.52% 3.0% 2.5% 2.0% 1.5% 1.0% 1.80% 0.97% 1.42% 1.93% 0.79% 1.20% 1.39% 0.62% 0.5% 0.0% -0.5% -1.0% -1.5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017-0.87% -0.30% Source: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan https://www.dgbas.gov.tw/
5 I. Taiwan s Economy GDP per Capita (USD) 30,000 25,000 20,000 17,026 17,814 18,131 16,988 19,278 20,939 21,308 21,916 22,668 22,400 22,561 24,337 15,000 10,000 5,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GDP Per Capita Source: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan https://www.dgbas.gov.tw/
6 I. Taiwan s Economy Unemployment Rate 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 5.21% 4.39% 4.24% 4.18% 3.96% 3.78% 3.92% 3.76% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 Source: National Statistics R.O.C. https://www.stat.gov.tw/
7 I. Taiwan s Economy Demographics 18.00 Population Birth Rate, Death Rate and Growth Rate 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 9.86 3.91 8.86 8.23 7.33 7.27 2.03 1.33 Birth Rate Death Rate Growth Rate *Source: Department of Household Registration, M.O.I.
8 I. Taiwan s Economy Demographics MALE Population Pyramid FEMALE 1,200 765 879 909 896 918 1,009 853 837 836 708 1,000 800 583 558 521 530 600 169 169 262 319 400 200 *Source: Department of Household Registration, M.O.I. TOTAL POPULATION : 23,539,816 80~84 75~79 70~74 65~69 60~64 55~59 50~54 45~49 40~44 35~39 30~34 25~29 20~24 15~19 10~14 5~9 0~4 Thousands 0 200 230 330 368 640 817 914 932 921 946 1,030 840 775 776 650 509 481 493 85+ 13.9% 73% 0 500 1,000 1,500 15-64 Working-Age Population
9 II. Taiwan s Insurance Market Market Players Domestic International Domestic International Domestic International Total : 28 Total : 23 Total : 3
10 II. Taiwan s Insurance Market Industry Performance USD, Million 120,000 100,000 80,000 60,000 WRITTEN PREMIUM 82,503 85,982 76,783 73,372 63,101 64,336 66,934 53,264 104,105 92,170 97,232 113,554 P&C 4.5% LIFE 95.5% 40,000 20,000-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LIFE P&C TOTAL
11 II. Taiwan s Insurance Market Industry Performance Brokers & Agents 7% Life Insurance Others 0% Channel Distribution Non-Life Insurance Broker 17% Direct 8% Bankassurance 51% Direct 42% Insurance SalesPerson 44% Insurance Agency 31% Direct Bankassurance Brokers & Agents Others Direct Insurance SalesPerson Insurance Agency Broker
12 II. Taiwan s Insurance Market Industry Performance USD, Million 5,000 4,000 3,000 2,000 1,000 - -1,000-2,000-3,000-4,000-5,000 NET INCOME 4,309 4,052 3,738 3,682 2,944 1,950 1,363 1,419 294 256-382 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017-3,951 LIFE P&C TOTAL P&C 9.2% LIFE 90.8%
13 II. Taiwan s Insurance Market Industry Performance 20.0% 10.0% 0.0% ROE 9.4% 11.5% 11.1% 11.6% 11.3% 7.0% 9.9% 10.0% 2.4% 1.5% -2.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017-10.0% -20.0% -30.0% -32.4% -40.0% -50.0% LIFE P&C TOTAL
14 II. Taiwan s Insurance Market Industry Performance Marine, 4.3% Aviation, 0.4% Fire, 16.1% Fire & Auto ~71% Property & Casualty Insurance -2017- Automobile, 54.8% Miscellaneous, 24.4%
15 II. Taiwan s Insurance Market Industry Performance NTD, Million 100,000.0 90,000.0 80,000.0 70,000.0 60,000.0 P&C WRITTEN PREMIUM BY LINE OF INSURANCE 80,092.1 85,950.7 2.9 bil USD 7.3% Automobile * Miscellaneous 50,000.0 40,000.0 35,178.8 38,163.9 8.5% Fire 30,000.0 20,000.0 23,025.4 25,293.2 9.8% Marine 10,000.0-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1.6% 30.9% Aviation *Miscellaneous includes Engineering, Liability, Credit, Accident, Health and Other Insurance
16 II. Taiwan s Insurance Market Industry Performance Life Insurance -2017-
17 II. Taiwan s Insurance Market Industry Performance NTD, Million 3000000 2500000 LIFE WRITTEN PREMIUM BY INSURANCE TYPE 2,237,540 2,680,802 2,525,362 6.2% 2000000 1500000 1000000 500000 323,138 338,146 353,157 Life Health Annuity Accident 4.4% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
18 III. Key Developments of Taiwan Insurance Market Taipei Casualty Report Date/Time: 23:50 p.m. Feb. 6. 2018 Epicenter: Hualien Scale : M L 6.0 Casualties: 17 Death, 291 Injuries Insurance Loss : NTD 170 Million as of Feb 22, 2018.
19 III. Key Developments of Taiwan Insurance Market Usage Based Insurance Internet Insurance Service IoT related insurance Electronic Policy i.e. Smart Home Detector Automated Claim payment combined with Residential Fire Insurance Cyber Insurance Product Development Development on InsurTech and Digitalized Service using Blockchain Technology Expanding oversea operation in accordance with government policy Incentive for Green Energy Expanding Operation in Accordance with Government Policy Develop Insurance Product and enhance solvency related to NatCat Protection gap for NatCat remains high Agriculture and Aquaculture insurance (Parametric and non- Insurance parametric) Formulating plans for adopting NatCat capital in RBC
20 III. Key Developments of Taiwan Insurance Market Amend Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms Tighten Regulation for Commercial Fire and Motor Insurance Premium Rating Regulatory Change Amend Regulations Governing Foreign Investments by Insurance Companies
21 III. Key Developments of Taiwan Insurance Market Promote Product Development RBC2 IFRS 9 IFRS 17 Innovative Product Regulatory Sandbox
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