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Taiwan's non-life insurers face risks of big pandemic-related losses

An analyst saw considerable uncertainty over the potential claims facing non-life insurers in Taiwan. Taiwan Ratings credit analyst Patty Wang said the biggest uncertainty that insurers face is how many policyholders would catch COVID-19 before their pandemic policies mature. Wang said sustained domestic transmission of SARS-CoV-2 would worsen COVID-19-pandemic-related losses for Taiwan’s non-life insurers this year and end the sector’s 21-year profit streak. She said the risks are particularly evident for insurers with the greatest number of outstanding pandemic policies. Though local insurers have sufficient liquidity to withstand the potential outflows from pandemic insurance claims, Wang said that adequate capital planning would become increasingly important for players with large pandemic insurance exposures and those with insufficient capital strength.

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