Capital Market Boom Drives 6 Major Insurers to Record NT$26.9 Billion Profit in May

Amid sustained momentum in AI-related stocks, the Taiwan Stock Exchange surged 5,806.31 points in May, boosting financial asset valuations and driving strong performance across the insurance sector. The six largest life insurers in Taiwan collectively reported a net profit of NT$26.92 billion in May 2024, a dramatic turnaround from the NT$34.89 billion loss recorded in the same month last year. Their cumulative profit for the first five months of 2024 reached NT$152.49 billion, representing a staggering year-on-year growth of 3,046%.

In the first five months of 2023, market volatility triggered by U.S. tariff policies and a sharp appreciation of the New Taiwan dollar led to a combined loss of NT$34.89 billion for these insurers in May alone. However, in 2024, the life insurance industry has benefited from favorable capital market conditions. Although profits narrowed slightly in March due to the U.S.-Iran conflict, global financial markets rebounded strongly from April onward, enabling the six insurers to achieve robust cumulative gains.

With stock indices repeatedly hitting record highs, insurers have actively realized capital gains from equity holdings. When including gains and losses from the sale of FVOCI (Fair Value through Other Comprehensive Income) stocks, Fubon Life’s adjusted profit for the first five months reached NT$123.46 billion, Cathay Life exceeded NT$100 billion, and KGI Life achieved NT$37.39 billion.

Fubon Life reported a post-tax net profit of NT$7.82 billion in May and a cumulative profit of NT$53.89 billion for the first five months, up 240% year-on-year. In addition to stable CSM (Contractual Service Margin) amortization and recurring investment income, the company benefited from the Taiwan Weighted Index rising nearly 15% in May to a new high, allowing partial realization of capital gains. Fubon Life’s individual FYP (First Year Premium) for the first five months reached NT$70.4 billion, up 31% year-on-year, with continued focus on protection-type and installment-payment products. As of the end of May, Fubon Life’s foreign exchange valuation reserve exceeded NT$150 billion.

Cathay Life posted a post-tax net profit of NT$8.93 billion in May and a cumulative profit of NT$34.87 billion, up 116% year-on-year. The insurer attributed the gain to capital market recovery, improved financial asset valuations, stable CSM amortization, and steady recurring income. May’s FYP and FYPE (First Year Premium Equivalent) stood at NT$32.4 billion and NT$6 billion respectively, maintaining growth momentum. Health and accident insurance FYP rose 2% month-on-month, while investment-type product FYP surged 36%. As of end-May, Cathay Life’s foreign exchange valuation reserve exceeded NT$128 billion.

Nan Shan Life reported a self-calculated profit of NT$5.829 billion in May, driven by stable CSM amortization, recurring income, and timely realization of capital gains. Its cumulative self-calculated profit for the first five months reached approximately NT$29.721 billion, up 853% year-on-year. The company focused on financial planning, high-coverage, and investment-linked annuity products in May, emphasizing high-value insurance sales to accumulate CSM.

Shin Kong Life recorded a post-tax net profit of NT$2.46 billion in May and a cumulative profit of NT$17.64 billion, turning profitable compared to the same period last year. The improvement was supported by steady CSM release and recurring investment income. Going forward, Shin Kong aims to enhance recurring income, deepen asset-liability matching, and improve funding flexibility. With the market rising in May, the company opportunistically realized capital gains from FVOCI stocks, contributing to retained earnings. Insurance business momentum remained strong, with FYP reaching NT$56.5 billion for the first five months, up 53% year-on-year.

Taiwan Life was affected by rising bond yields, reporting a post-tax net profit of NT$283 million in May and a cumulative profit of NT$8.681 billion, up 41% year-on-year. The profit stemmed from past CSM amortization, fund valuation gains, and the impact of re-measuring investment-linked policies under IFRS 15. Insurance business was driven by dividend and investment-type policies, with cumulative new contract premiums reaching NT$56.3 billion, up 160% year-on-year.

KGI Life reported a post-tax net profit of NT$1.602 billion in May and a cumulative profit of NT$7.687 billion, turning profitable year-on-year. Its cumulative new contract premium income for the first five months reached NT$45.9 billion, up 48% from the same period last year. Traditional foreign-currency policies and investment-type products remained sales drivers, with year-on-year growth of 43% and 315% respectively. As of end-May, KGI Life’s foreign exchange valuation reserve stood at NT$48 billion.

Starting in 2026, the insurance industry will adopt IFRS 17 (International Financial Reporting Standard 17). Under this standard, the profit from each insurance policy is recognized as CSM and gradually released into earnings over time, making CSM a key indicator of insurers’ medium- to long-term profitability. (Edited by Yang Kai-Xiang)