Taiwan’s life insurance sector will bounce back in 2024 – GlobalData

The industry is forecast to grow at a compound annual growth rate (CAGR) of 3.0% to $91.6b in 2027.

Taiwan's life insurance market is poised for a turnaround from 2024 after facing a continuous decline since 2019. This positive shift is expected to be driven by improvements in the global macro-economic situation, rising interest rates, and positive regulatory developments, according to GlobalData.

While Taiwan's life insurance market is projected to decline by 2% in 2023 due to factors like prolonged low-interest rates and lack of innovation in product offerings, the industry is forecast to grow at a compound annual growth rate (CAGR) of 3.0% from $77.7b in 2023 to $91.6b in 2027, in terms of direct written premiums (DWP).

Anurag Baliarsingh, Insurance Analyst at GlobalData, noted that the decline in 2022 was unprecedented, with a 21.4% drop attributed to uncertain market conditions affecting renewals. 

The appreciation of the US dollar led to a 32% decline in premiums from foreign-currency-denominated life insurance policies, representing 46.7% of new business in 2022.

Term life insurance, accounting for a 45.4% share of Taiwan's life insurance DWP in 2022, is expected to grow at a CAGR of 3.4% over 2023-2027. 

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Positive regulatory developments, such as proposals to allow neo-insurers to sell online term insurance, are expected to support term life insurance sales.

Endowment insurance, with a 21.6% share of life insurance DWP in 2022, is anticipated to grow at a CAGR of 2.3% over 2023-2027. 

The demand for endowment insurance products is supported by their higher returns compared to other life insurance products, particularly amidst high inflation impacting disposable income.

Personal Accident and Health (PA&H) insurance, the third-largest product with a 20.9% share of DWP in 2022, is expected to grow at a CAGR of 3.3% during 2023-27. 

PA&H insurance growth is supported by demographic factors, including a super-aging society and high life expectancy in Taiwan.

General annuity and other life insurance products collectively accounted for the remaining 11.7% share of DWP in 2022.

Despite the forecasted recovery from 2024 onwards, Taiwan's life insurance industry is not expected to reach its previous levels of growth in the near term.