Insurers see extra NT$4.5 bil. annual gains from RMB trading
The China Post news staffTAIPEI, Taiwan -- Local life insurers are poised to increase their profits by NT$4.5 billion annually after they were given access to renminbi-denominated investments, according to a tally by the Life Insurance Association (LIA), R.O.C., released yesterday.
January 25, 2013, 12:46 am TWN
According to the LIA, the government's policy to allow Taiwanese life insurers to invest in Chinese currency-denominated real estate properties and securities will help improve the companies' capital utilization flexibility, asset allocation ability and mainland branch operation.
Currently eight local insurers have applied for a QFII (qualified foreign institutional investors) quota from mainland China, the LIA pointed out. Life insurers are expected to see NT$500 million annual profit gain thanks to QFII-related investments and NT$4 billion from dim sum bonds.
Meanwhile, the LIA said will deliver life insurers' proposal for self-regulation in local real estate investment, including an offer to set minimum rate of return at 2.875 percent, to the Financial Supervisory Commission (FSC) by the end of February in a bid to persuade the FSC to lift its ban on such investment by March. All overseas real estate investments by Taiwanese life insurers have return rates far above 2.875 percent, the LIA said.