Insurance sector reports record earnings in 2013
By John Liu , The China Post
January 16, 2014, 12:10 am TWN
TAIPEI, Taiwan -- Four major domestic insurance companies reaped in NT$57.6 billion in profit in 2013, which was an 84-percent growth year-on-year.
It is estimated that the insurance industry reaped in NT$65 billion in total last year, which was a record high.
In addition, the banking industry raked in NT$250 billion last year, which was also a new record. The industry has been hitting new records for four continuous years, said Jean Chiu (邱淑貞), Financial Supervisory Commission (FSC) banking bureau deputy director-general.
Thanks to increases in real estate value, resurgence in the stock market, increases in cash dividend revenue and lower foreign exchange hedging costs, major insurance companies reported growth in revenue last year.
Cathay Life Insurance Co. (國泰人壽) profited NT$15.45 billion last year, which was a 367-percent growth year-on-year. The insurance giant reported a profit of NT$10 billion due to increase in value of its real estate in portfolio.
Cathay Life's Return on Property Investment Remains Level
The company forecasts it will reap the same profit from real estate this year. The company also reaped tens of billions in profit from cash dividends last year. Foreign exchange hedging costs also reached their lowest point in 2013, and were much lower than 1 percent. As the interest rate is expected to grow this year, analysts predict that Cathay Life will have another profitable year.
Shin Kong Life (新光人壽) sold a financial building in a major commercial district in Taipei to pocket NT$7.6 billion. The company did not recognize any profit due to increases in real estate value last year. However, it did recognize a cash dividend of NT$6 billion.
Nan Shan Life Insurance Co. (南山人壽) reported an after-tax profit of NT$16.439 billion last year, which was a 76-percent growth from the previous year. The company reported NT$5.4 billion in profit due to increases in real estate values. In addition, cash dividends and gains on bonds also reached tens of billions.
As the global economy improves, interest rates grow and capital markets show signs of recovery, the insurance industry is expected to grow down the road, FSC Chairman Tseng Ming-chung (曾銘宗) said.
For the banking industry, the sector reaped a pre-tax earnings of NT$243 billion in total between January and November, surpassing the NT$240.2 billion registered the previous year. It is predicted that the total earnings in 2013 would exceed NT$250 billion, rendering a more-than 10-precent return on equity, also a new record.