Keen rivalry between conventional insurers saw a declining Taiwanese reinsurance sector in 2012, with insurers looking to mainland China for new opportunities.
A Research and Markets report, “Reinsurance in Taiwan, Key Trends and Opportunities to 2017”, looked at the reinsurance market in the state.
The report finds that in terms of gross written premium, the Taiwanese reinsurance segment declined from $0.3 billion in 2008 to $0.28 billion in 2012, at a compound annual growth rate of -2.9 percent during the review period.
The negative growth in the segment was partly due to intense competition in conventional insurance segments, resulting in low earnings.
Fierce pricing competition among conventional insurers and low profit margins also led to declines in reinsurance premium rates, which subsequently discouraged reinsurance business in Taiwan during the review period.
The report notes that there is a trend in Taiwan for reinsurance firms to look beyond the island. The review concludes that positive economic development and government policy reforms, including the establishment of trade services with mainland China will support this goal.
Another finding of the report includes the percentage of premium ceded to reinsurers by the life insurance segment. It was 2.3 percent in 2012 and is expected to rise to 3.4 percent in 2017.
