Taiwan’s general insurance industry is forecast to grow at a compound annual growth rate of 4.3% during 2019-2024, supported by the gradual economic recovery, according to GlobalData.
The analytics company said the insurance sector is projected to see gross written premiums grow from TWD188.6bn ($6.1bn) in 2019 to TWD232.7bn ($8.3bn) in 2024.
Pratyusha Mekala, insurance analyst at GlobalData, said: “Stringent measures by the government to control the spread of the pandemic shielded the economy from major shocks in 2020. According to the National Statistics of Republic of China (Taiwan), the country’s GDP grew by 3.11% in 2020, outpacing China’s GDP growth rate, of 2.3%, for the first time in 30 years. The improved economic scenario had a positive impact on the Taiwan’s general insurance industry.”
The largest segment of the industry is motor insurance, which accounts for more than 50% of the total general insurance premium. GlobalData said motor is estimated to grow by 4% in 2020, driven by growth in car sales, which also increased by 4% in 2020 to reach 457,435 units, the highest in 15 years. “The restrictions imposed on international travel have prompted more consumers to take domestic trips, which helped drive vehicle sales and in turn supported the demand for motor insurance. Additionally, government subsidies to encourage replacement of old vehicles further contributed to the car sales growth in 2020,” said GlobalData.
The second-largest segment is property insurance, which accounted for a 19.1% share of the general insurance premium. GlobalData said that increased investments in infrastructure, along with insurance demand for commercial accounts, supported the premium growth in fire and engineering lines, adding that the segment is expected to grow by 8.8% in 2020, due to the steady demand for these lines.
Personal accident and health insurance accounts for 11.8% of general premium, and health insurance is expected to be one of the fastest-growing lines, supported by increasing consumer awareness due to the pandemic. Policies with Covid-19 hospitalisation benefits are gaining prominence and insurers are offering policies waiving the standard waiting periods, to drive sales, said the analytics company.
“Effective management of the Covid-19 outbreak is expected to limit the impact of the pandemic on the general insurance industry in Taiwan. Fiscal support by the government along with booming exports will help the growth of the country’s general insurance industry over the next couple of years,” said Ms Mekala.