Friday, November 24, 2017

Taiwan insurers urged to strengthen hedging measures

With the New Taiwan dollar gaining momentum, the Financial Supervisory Commission has encouraged life insurers to boost their measures on hedging.

Listed companies incurred foreign currency losses as a result of the 2.44% rise in the value of the currency versus the US dollar. In total, the losses reached NT$139.9 billion (US$4.6 billion).

Of these losses, financial firms accounted for about 90% of the load because of the heavy overseas investment portfolios managed by their life insurance units.

The local dollar’s recent showing of strength has also prompted lawmakers to be more wary about the financial sector’s sensitivity to forex risk.

According to Jenny Lee, director general of the Insurance Bureau, hedging measures and profit from such activities will help curtail losses.

Lee added that it would also help if firms build safety nets to ward off threats associated with foreign currency fluctuations.

 

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