Wednesday, September 20, 2017

Taiwan market set to lose up to US$4.9bn

The Taiwanese dollar’s appreciation and insurers’ foreign investment exposure could take a toll on the industry in the first quarter of this year.

William Tseng, Kuomintang Legislator and former chair of the Financial Supervisory Commission (FSC), estimates that the country’s insurance industry is set to lose between NT$120 billion and NT$150 billion (US$3.9 billion and US$4.9 billion).

At a Finance Committee meeting, Tseng said the Taiwanese dollar has appreciated 5% against the US dollar so far this year, which means the repatriation of income from Taiwanese insurance firms’ overseas investments would significantly decrease after the currency exchange.

FSC Insurance Bureau director-general Grace Lee, however, said that 74% of insurance industry investments are hedged to reduce risk.

But Tseng insisted that the 26% unhedged investments pose a serious risk to the industry.

Data from the FSC showed that the amount of overseas investments held by the financial sector totals US$27.4 trillion, of which NT$11.5 trillion is held by the insurance industry.

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