Taiwan’s general insurance industry growth slows in 2022

However, an analyst predicts it will ramp up in 2023 at a CAGR 5.4%.

Taiwan’s general insurance industry will register a slower growth rate in 2022 at 3.5%, a far cry from its double-digit growth of 10.1% in 2021.

However, GlobalData analyst Shabbir Ansari predicts that it will ramp up in 2023, reaching more than $31b in terms of gross written premiums driven by a strong real estate market, rising demand for health insurance policies, and recovery in new vehicle sales. The industry will grow at a compound annual growth rate of 5.4%.

“Sluggish growth in motor insurance, which accounts for over 50% of the general insurance premiums, is expected to impact the industry growth. However, the industry is expected to recover from 2023 onwards and witness an upward growth trend supported by the economic stability and recovery in vehicle sales,” Ansari said.

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Amongst the top general insurance lines in Taiwan, motor insurance was the largest, with a 52.3% share in terms of GWP in 2021. Motor insurance is expected to remain sluggish in 2022 due to lower vehicle sales caused by supply chain disruptions arising from the global automobile chip shortage. The segment is expected to recover gradually from 2023 and grow at a CAGR of 4.7% during 2021-26, driven by a recovery in vehicle sales.

The proposed amendments to impose an additional fee for traffic violations under the compulsory motor third-party liability (MTPL) is expected to increase premium rates, which will result in a higher motor insurance premium.

Property insurance was the second-largest line in Taiwan, accounting for an 18.7% share in terms of GWP in 2021. Growing demand for residential property aided by strong economic recovery and low-interest rates will support the growth of property insurance. It is forecasted to grow at a CAGR of 6.2% over 2021-26.

The government’s continued investments in large infrastructure projects such as railway projects, green energy, and urban and rural development projects will further support property insurance growth.

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Personal accident and health (PA&H) insurance was the third-largest line, accounting for an 11% share of general insurance premiums in 2021. The PA&H line registered 13.4% growth in 2021. Increasing healthcare costs and a surge in health insurance demand due to increased awareness supported the growth of PA&H insurance. It is expected to grow at a CAGR of 5.1% during 2021-26.

Marine, aviation and transit (MAT), Miscellaneous, Liability and Financial Lines insurance accounted for the remaining 18% share in 2021.

“Taiwan’s general insurance industry is poised for consistent growth over the next five years, driven by motor and property lines. The growth, however, might get overshadowed by the economic uncertainties due to a potential global recession and geopolitical instabilities,” Ansari concludes.