A spike in claims due to a COVID-19 resurgence could lead to a capital event for some of the island's non-life insurers with in-force pandemic-related insurance products, according to a new AM Best commentary.
Several Taiwanese insurance companies have halted sales of overseas travel insurance policies that cover medical expenses due to sudden illness, in a bid to curb potential losses arising from payouts for COVID-19.
Fitch Ratings has revised the outlook on Taiwan Life Insurance's Insurer Financial Strength (IFS) Rating to 'Positive' from 'Stable', to reflect the global credit rating agency's expectation Taiwan Life will sustain the improvement in its operating results and a sound capital buffer in light of its asset-management strategy and product mix.
Based on the latest available information provided by the company, Cathay Century Insurance's regulatory capital solvency remained at a healthy level at 296% as of the end of the first quarter of 2022, notes AM Best.
Five local insurers are considering raising new funds to bolster their financial strength as increasing compensation claims from COVID-19 insurance policyholders are reducing their profits, the Financial Supervisory Commission (FSC) has said.
Insurers have already paid out more to customers-NT$2.6bn ($89 m) in COVID-related claims -- than the NT$2.1bn in premium income they have received, reported Bloomberg.
Taiwan's insurance sector could pay out up to NT$41bn (US$1.39bn) in COVID-19 claims due to the recent Omicron surge in the territory.
Taiwan's two main insurance industry associations have agreed to accept digital COVID-19 certificates of those who have been confirmed as positive as valid proof of infection, ending a standoff with the main financial regulator.
The impact of COVID-19 continues to accelerate the development of InsurTech in Taiwan's insurance industry as can be seen in the increasing variety of circumstances where InsurTech is applied, says the law firm Lee and Li Attorneys-at-Law which is a member of the Global Insurance Law Connect (GILC), an alliance of insurance law firms spanning four continents.
If the number of confirmed COVID infection cases in Taiwan is up to 3m, domestic property insurance companies should be able to sustain operations after taking into account increases in share capital, the withdrawal of reserves to offset losses, and changes in the government's policy on confirmed diagnoses, the director-general of the Insurance Bureau, Ms Shih Chiung-Hwa, has said. This is because the insurers have adequate capital.