2024 Set to Revitalize Taiwan’s Life Insurance Industry After Prolonged Slump

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After facing a tumultuous period since 2019, the Taiwan life insurance sector is gearing up for a promising comeback in 2024.

Various factors contributed to a decline in recent years, including global economic fluctuations, low-interest rates, and the impact of certain policy terminations.

Market Downturn Forecast for 2023 in Taiwan Life Insurance

Despite the hopeful outlook for 2024, the latest insights from GlobalData indicate that the market is expected to witness a further decline of 2% in 2023.

Contributing factors to this downturn include low-interest rates, a lack of innovative products, and the discontinuation of high-claims-payout policies.

Projected Growth and Challenges Ahead

Forecasts reveal a promising future for the industry, with a projected compound annual growth rate (CAGR) of 3% from 2023 to 2027 in terms of direct written premiums (DWP).

However, challenges such as the appreciation of the US dollar and changing consumer preferences have impacted specific insurance categories.

Potential Growth Drivers

The term life segment, which holds the largest share in Taiwan’s life insurance market, has experienced a decline in recent years due to changing customer preferences and inflation.

Nevertheless, regulatory developments, such as allowing neo-insurers to sell online term insurance, are expected to boost the segment’s growth.

Endowment Insurance and Investment-Linked Policies

Endowment insurance, accounting for a significant portion of the DWP, is anticipated to grow with the popularity of investment-linked endowment policies.

These policies offer better returns than regular savings products from banks.

Personal Accident and Health Insurance

With the third-largest share in the market, personal accident and health insurance are expected to see further growth due to factors like a super-aging society, high life expectancy, and government initiatives to provide equitable and digital healthcare.

A Positive Outlook for 2024 and Beyond

The forecast for 2024 and beyond presents a positive outlook for Taiwan’s life insurance industry, with regulatory developments acting as a catalyst for recovery.

Nevertheless, experts anticipate that reaching previous growth levels may take time.