Taiwan regulator meets insurers over hedging risks

Taiwan’s Financial Supervisory Commission met with major life insurers to assess the impact of a sharp New Taiwan dollar surge on their US bond holdings. The currency’s intraday gain of 5%—its largest in over 30 years—has intensified pressure on insurers, who collectively hold over NTD23tr (USD763bn) in foreign assets, largely in unhedged US debt. As exporters sold off dollars and expectations rose over a potential US-Taiwan trade deal, life insurers faced renewed currency risk. With only 65% of holdings hedged at end-2024, firms are now re-evaluating strategies to prevent losses. The FSC is urging insurers to manage foreign exchange risks more actively, as the sector now contends with past interest rate shocks, unrealised losses, and a strengthening NT dollar that threatens recent returns.