The general insurance industry in Taiwan is projected to grow at a compound annual growth rate (CAGR) of 6.7% from TWD200.1bn ($6.8bn) in 2020 to TWD277.0bn ($10.4bn) in 2025, in terms of gross written premiums (GWP), according to GlobalData.
GlobalData’s strategic intelligence report, ‘Taiwan General Insurance – Key Trends and Opportunities to 2025’, reveals that consistent growth in major general insurance lines such as motor and property insurance as well as new product developments in liability insurance will support the growth of the Taiwanese general insurance industry.
Deblina Mitra, Senior Insurance Analyst at GlobalData, comments: “Despite being a developed economy, Taiwan’s general insurance industry’s penetration, as a percentage to GDP, is at around 1.0%, which is way below the developed markets’ average of 4.0%. This is due to lower uptake of insurance lines such as property and liability.”
To bridge the gap, in recent years, the government and regulators have taken steps to diversify the industry with notable developments registered in liability and agricultural insurance lines. This includes the 2021 regulation, in which the government made occupational accident insurance mandatory for all employees.”
Motor insurance, which accounts for 53.7% share in terms of GWP, grew by 7.0% in 2020. An increase in premium prices and strong growth in vehicle sales helped its growth. However, the short-term outlook for motor insurance remains negative due to the global shortage of semiconductors. Overall, the motor insurance GWP is expected to grow at a CAGR of 5.9% over 2020–2025.
Property insurance is the second-largest general insurance line with a share of 20.1% of the GWP in 2020. Property insurance grew by 11.4% in 2020, driven by growing demand from the real estate, manufacturing, and infrastructure construction sectors. An increase in premium rates linked to natural hazard insurance also contributed to the growth. Taiwan is highly vulnerable to earthquake risk and covers earthquake insurance as default within all fire insurance policies.
The introduction of ‘The Farmers’ Insurance Act’ in 2021, which paved the way for insurers to develop solutions covering risks faced by farmers, will create new opportunities. As a result, property insurance is expected to grow at a CAGR of 5.3% during 2020-2025.
Personal accident and health (PA&H) is the third-largest insurance line with a GWP share of 10.7% in 2020. Taiwan’s transition into a super-aged society over the next five years is expected to enhance the demand for health insurance, which is expected to grow at a CAGR of 5.8% over 2020-2025.
Other insurance lines including liability, marine, aviation, and transit (MAT) and financial lines accounted for the remaining 15.5% share in 2020.
Mitra concludes: “Taiwan’s low insurance penetration and strong export-oriented manufacturing sector provide ample opportunity for general insurance growth. Stable economic factors coupled with the government’s initiatives to expand the general insurance industry through new product development are expected to support its growth over the next five years.”
