Taiwan's protection business is growing slowly

Taiwan life insurers expect continued demand for their savings-type products over the next 12-18 months, thanks to a high a high national
saving rate of 34% of GDP in 2016, according to Moody’s. However, whilst continuing savings-type product growth will sustain the industry’s topline and profit momentum, Moody’s noted that this growth is credit negative as it reflects the industry’s slow progress in expanding its protection-type products.

As shown in the second chart, the average sum assured per in-force policy has been low at TWD470,000 ($15,000) and is slightly declining, which indicates protection elements have remained low in new insurance sales in recent years. In addition, the average annual premium growth rate of pure protection products, such as
accident and health, has been subdued at 2% between 2012-16, as seen in the first chart. “However, we expect continued improvement in the product features of savings products, driven by the regulator’s tightened guidance.”