The Taiwanese general insurance industry is set to grow at a compound annual growth rate (CAGR) of 6.8% from TWD279.8 billion ($9.0 billion) in 2024 to TWD364.2 billion ($12.2 billion) in 2028, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.
GlobalData’s Insurance Database reveals that Taiwan’s general insurance industry is expected to grow by 9% in 2024, supported by an increase in motor sales, rising premium rates of motor and property insurance, and the country’s demographic factors such as an aging population.
Sutirtha Dutta, Insurance Analyst at GlobalData, comments: “Taiwan’s general insurance industry grew by 9.8% in 2023, driven by economic growth that led to an increase in exports and domestic consumption. Increasing vehicle sales and a rise in premium rates for motor and property insurance also supported the growth of general insurance. The trend is expected to continue in 2024.”
Motor insurance is the leading line of business in the Taiwanese general insurance industry and is expected to account for 50.2% share of the general insurance GWP in 2024. Supported by growing vehicle sales, it is expected to grow by 7% in 2024. As per the Ministry of Transportation and Communications, new vehicle sales grew by 11% in 2023 to reach 476,987 units, which is the highest since 2005.
Taiwan is witnessing a rise in cases of traffic accidents that has increased the volume and cost of claims for insurers. According to the Ministry of Transport, there had been a total of 402,926 traffic accidents in 2023, an annual growth of 7.2%. This has resulted in motor insurance gross claims growing by 7.1% to reach TWD 17.4 billion in the first quarter of 2024 as compared to 2022, as per Taiwan Insurance Institute (TII).
The rising cost of claims will prompt insurers to reassess their risk exposure and increase the premium rates in 2024. According to the Property and Casualty Insurance Association, motor insurance premium rates are expected to rise by 6% in 2024, which will support motor insurance growth. Motor insurance is expected to grow at a CAGR of 5.5% during 2024-28.
Property insurance is the second-largest line that is expected to account for a 23% share of general insurance GWP in 2024. It is expected to grow by 15.9% in 2024, driven by the country’s frequent exposure to natural catastrophic (nat-cat) events such as earthquakes, typhoons, and floods. For example, the Hualien Shoufeng Earthquake in 2024 has resulted in an insured loss of TWD473 million. The occurrence of such incidences has increased the premium rates for fire insurance and reinsurance rates for commercial property insurance.
Dutta adds: “Although Taiwan has an earthquake insurance plan in place, it covers only 38.6% of the total households as of July 31, 2024. The remaining households that are yet to be covered under this plan present a scope for the growth of property insurance. Property insurance is expected to grow at a CAGR of 2.8% during 2024-28.”
Personal Accident and Health (PA&H) insurance is the third-largest line that is expected to account for 10% share of general insurance GWP in 2024. It is expected to grow by 7.4% in 2024, driven by rising medical inflation and a rise in aging population as the country moves towards a super-aged society. The share of people above the age of 65 is expected to reach 18.8% in 2024, and it is expected to grow by 3.7% during 2024-28. PA&H insurance is expected to grow at a CAGR of 7.4% during 2024-28.
Liability, marine, aviation, and transit (MAT), financial lines, and other general insurance lines are expected to account for the remaining 16.7% share of the general insurance GWP in 2024.
Dutta concludes: “Taiwan’s goal to achieve an annual economic growth of around 3% in the next four years will support the growth of the general insurance industry. With the government’s push for net-zero emission path by 2050, continued investments in the renewable energy sector and electrification and carbon-free transportation will support the growth of the general insurance industry over the next five years.”
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