The American Chamber of Commerce in Taipei has proposed several long-term goals and short-term objectives for the island’s insurance market so as to cover protection gaps.
These are set out in the 2018 edition of the chamber’s annual Taiwan white paper, which was released recently. The long-term goals could have a 3-5 year timeframe while the short-term objectives should be achieved within 3-18 months.
The suggestions for five key areas of focus are:
1: Address the risks of dying too soon.
Long-term goal: Significantly increase the level of death protection for Taiwanese people.
- Promote greater societal understanding of the true protection-oriented role of insurance and the value of protection to families.
- Encourage consumers to purchase appropriate levels of protection – through targeted tax incentives for protection-oriented products and other means.
2: Address the risks of living longer than expected.
Long-term goal: Increase consumers’ understanding of the need for lifetime income in retirement and increase the amount of longevity protection for Taiwanese people.
- Promote greater societal understanding around longevity risk and the need for protection against increased longevity through lifetime income products.
- Encourage consumers to purchase appropriate levels of longevity protection – through targeted tax incentives for lifetime income products and other means.
3: Address the risks of being under-insured through life.
Long-term goal: Ensure that citizens have adequate cover to protect them from a range of perils that could jeopardise their financial security. Over the long-term, Taiwan should increase the level of required protection in such areas as professional and third party liability insurance.
- Help businesses do business more easily with other businesses (eg, waive the wet signature requirement).
4: Actively enhance the customer experience and enable and encourage product innovation.
Long-term goal: Promote measures that enhance the customer’s product choice and experience – providing greater speed, flexibility, and regulatory certainty around the new-product development process.
- Create a dedicated team within the Insurance Bureau to encourage product innovation by providing more flexibility in product pricing and the filing process.
- Embrace new technology to facilitate insurance purchases and service.
5: Promote sound asset/liability and investment management practices and safeguard industry solvency.
Long-term goal: Provide Taiwan-regulated insurers the same access to and benefits from more advanced regulation of investment, hedging, and risk management capabilities – to promote sound asset and liability management practices and to safeguard industry solvency.
- Remove the minimum-issuer rating for foreign corporate bonds and financials and replace it with the more widely used and meaningful minimum-issue rating.
- Refine the requirement that limits exposure from stock, corporate bond, loan and financial investment based on the issuing company’s shareholder equity
- Permit insurance enterprises to conduct ‘overseas securities investment fund’ transactions with interested parties by granting the relevant management department a general authorisation from the company board to execute such trades according to established internal operating procedures.
- Permit insurance enterprises to exclude all foreign investments backing foreign-currency-denominated traditional products from the calculation of the limit on the total amount of foreign investment. A