News eDaily14 Jul 2017

Taiwan:Forex pressures ease in June for life insurers

14 Jul 2017

Taiwanese life insurers are expected to see an easing of foreign exchange pressures as the pace of appreciation of the New Taiwan dollar has slowed, the Financial Supervisory Commission (FSC) has said.

The Taiwanese currency has weakened against the greenback after hitting a peak in May.

As at the end of May, life insurers accumulated NT$97 billion (US$3.18 billion) in forex losses as the New Taiwan dollar rose by 6.74% against the US dollar compared to the start of the year, reported the Taipei Times.

Life insurers posted pre-tax earnings of NT$5.3 billion at the end of May, after posting losses of NT$4.3 billion in April.

At the same time, life insurers’ unhedged foreign exchange exposures have declined steadily since the beginning of this year, from NT$227.1 billion in January and NT$189.1 billion in February, to NT$24.1 billion in May, data from the Commission show.

During the first five months of the year, life insurers also reduced their reliance on foreign exchange valuation reserves, with charges falling from NT$13.6 billion in January to just NT$100 million in May, the data showed.

Still, the FSC warned that life insurers’ pools of reserves have seen rapid depletion, having fallen to NT$16.9 billion from NT$44.1 billion at the end of last year.


 


 

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