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The Taiwanese general insurance industry is set to grow at a compound annual growth rate (CAGR) of 6.4% from TWD248.1 billion ($8.4 billion) in 2023 to TWD317.8 billion ($11.3 billion) in 2027 in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.
GlobalData’s Insurance Database reveals that the general insurance industry in Taiwan is expected to grow by 6.2% in 2023, supported by an increase in new vehicle sales and rising demand for private health insurance.
Aarti Sharma, Insurance Analyst at GlobalData, comments: “Taiwan’s general insurance industry grew by 6.1% in 2022 after registering a double-digit growth of 10.1% in 2021. An uncertain global economic outlook and geopolitical uncertainties, as well as the weakening of the Taiwanese dollar against the US dollar, led to slower growth in the industry in 2022. The industry is expected to witness a similar growth trend over the next five years, supported by favorable regulatory developments and government initiatives.”
Motor insurance is the leading line of business in the Taiwanese general insurance industry, with an estimated GWP share of 50% in 2023. It is forecast to grow by 6.1% in 2023, supported by an increase in vehicle sales. According to Taiwan’s Directorate of Highways, total vehicle sales increased by 15% to 277,216 units between January–July 2023, up from 241,343 units sold during the same period in 2022.
Recent regulatory developments have also supported motor insurance growth in the country. For instance, in November 2022, the Financial Supervisory Commission (FSC) issued an amendment to compulsory automobile liability insurance for two-wheelers. The amendment included providing insurance coverage for micro-electric two wheelers (e-bikes). Further, effective June 2023, the Ministry of Transportation and Communications (MOTC) mandated taxi and intercity bus operators to obtain passenger liability insurance coverage. This will also support the motor insurance industry, which is expected to grow at a CAGR of 6.7% over 2023–27.
Property insurance is the second largest general insurance line with an estimated GWP share of 18.9% in 2023. Fire and natural hazard insurance will account for 80.7% of total property insurance premiums in 2023 as Taiwan is prone to natural hazards such as earthquakes, landslides, and floods.
The growth in property insurance is also supported by the commercial construction sector, which is expected to grow at an annual average growth rate of 3.5% over 2024–2027. As a result, property insurance is expected to grow at a CAGR of 6.1% over 2023–27.
Non-life PA&H insurance is expected to account for 10.3% of the GWP share in 2023. It is expected to record a CAGR of 5.3% over 2023–27 due to increased health awareness post-pandemic. Increasing medical costs, limited coverage of public healthcare, and long wait times are supporting the demand for private health insurance in Taiwan.
The growth in PA&H insurance in 2022 was overshadowed by higher claims payout from previous years resulting in higher losses for insurers. As per GlobalData’s Insurance Database, gross claims increased from TWD11 billion ($391.2 million) in 2021 to TWD166.6 billion ($5,589.6 million) in 2022 majorly due to the settlement of claims for COVID-19 related policies. This caused gross claims of the general insurance industry to increase from TWD103 billion ($3.7 billion) in 2021 to TWD307.4 billion ($10.3 billion) in 2022.
Financial lines, liability, marine, aviation, and transit (MAT), and miscellaneous insurance are expected to account for the remaining 20.7% share of the general insurance GWP in 2023.
Aarti concludes: “Favorable regulatory developments and government initiatives are expected to present sustainable growth in Taiwan’s general insurance industry. However, rising economic and geopolitical instabilities along with increasing losses will remain a challenge for insurers.”