The biggest life insurers in Taiwan saw a near-100% jump in losses in May, as the recent surge in the local currency continued to reduce the value of their foreign investments.
Company statements on Tuesday showed that losses among the four largest insurers reached NT$35.35bn (US$1.2bn), with Shin Kong Life Insurance Co reporting the biggest loss of NT$15.38bn.
Fubon Life Insurance Co. reported a near fourfold increase in losses to NT$9.14bn compared to a month prior. Taiwan Life Insurance Co. saw its losses double to NT$2.83bn. Meanwhile, KGI Life Insurance Co. said its losses soared to NT$7.997bn.
On the flip side, Cathay Life Insurance Co recorded a profit of NT$440m, in part thanks to its hedging efforts. Nan Shan Life also posted a profit of NT$13m.
In April, Taiwan’s largest life insurers posted a combined loss of nearly NT$19bn — their worst performance in over a year — also due to the strengthening of the New Taiwan dollar against the greenback, spurred by trade tensions.
This development also comes on the heels of Fitch Ratings downgrading its 2025 outlook for Taiwan’s life insurance sector to ‘deteriorating’ from ‘neutral’, citing risks to earnings amid the local currency’s appreciation.
(Re)in Asia in June spoke to analysts who said Taiwanese life insurers need to boost their asset-liability management, given that just 60–70% of their foreign currency exposure is hedged. Analysts pointed out that these insurers face considerable risk due to local currency appreciation, as a significant share of their investments are concentrated in US Treasuries and corporate bonds.
