Taiwanese insurers and banks decreases exposure to China to record low

Aggregate exposure through loans, investments, and deposits contracted by 1% sequentially.

Taiwanese banks and life insurers have reduced their exposure to China to a record low due to the COVID-19 pandemic, economic uncertainty, and declines in the property market, according to a report by the Taipei Times.

Citing data from the Financial Supervisory Commission (FSC), the report said that life insurance firms had their investment in China for the sixth consecutive quarter in Q3, with their combined investment sliding to $4.75b at the end of September, the lowest in the past 25 quarters.

Going by the data provided by the FSC, Cathay Life insurance had the highest investment in China amongst its peers at $1.02b, however, its investment has been decreasing for the last six consecutive quarters. Other members of the top five who saw their investments in China reduced are Taiwan Life Insurance, Fubon Life Insurance, China Life Insurance, and Nan Shan Life Insurance.

Meanwhile, for banks, their aggregate exposure through loans, investments and deposits contracted about 1% sequentially to $37.9b at the end of September, the lowest in nine years.

On an annual basis, it fell by 17%.

Local banks’ exposure to China accounted for 29% of their combined net value of $130b, down from 36% a year earlier, the data showed.