Taiwan life insurance market's profitability improves - Moody's

Moody's Investors Service said the profitability of Taiwan's life insurance market has been improving on increased sales in investment-linked products.

Moody's said that with a population of 22.9 mln in 2006, the penetration of Taiwan's life insurance premium reached 3.2 pct, the highest in Asia (excluding Australia).

Moody's said better distribution and diversification from more cross-selling and bancassurance activities had helped to make life insurance policies more easily available to customers.

But the ratings agency noted that negative spread, arising from selling high, fixed-rate guarantee policies in the early years, is still hurting profitability.

Nevertheless, the situation is improving as many life insurers have modified their product mixes to include more investment-linked products, which are less capital intensive and less risky for insurers, Moody's said.