In this Q&A, RGA's Claire Wang discusses recent trends in the Taiwan life insurance market. A version of this article was originally published in the July 2024 issue of Asia Insurance Review.
As Senior Vice President and Chief Executive Officer of RGA Taiwan, Claire Wang is responsible for driving business strategy and overseeing the region’s operations. In this Q&A prepared for Asia Insurance Review, she discusses market changes and emerging opportunities.
Several key factors are driving the evolution of the Taiwan life insurance market: an increasingly aging population, strong consumer awareness of the need for health insurance coverage following COVID-19, and IFRS 17 and Insurance Capital Standards (ICS) scheduled to be implemented in Taiwan in 2026. In response to these key factors, we saw the launch of the first senior product targeting ages 50+ with more flexible underwriting. We saw greater demand for critical illness (CI) and medical products and an increased focus on products that generate healthy contractual service margins for insurance companies.
Product development is driven by customer demand, new regulations, and the market environment. Rising interest rates and a strong equity market encouraged saving products such as unit-linked products and interest-sensitive whole life products, among others. Strong awareness of the need for financial protection post-COVID has led customers to look for advanced treatment coverage in medical products. In addition, new regulations led to the discontinuation of dismemberment products in 2020 due to worsening loss experience.
Different customer segments are seeking different life insurance products. High net worth customers are still looking for high mortality sum-assured products with high death coverage and the benefit of estate transfer. They also are seeking high medical coverage products, and we have seen some direct insurers offering this type of product to high net worth banking customers. For the mass markets, saving and protection remain the two main themes to meet rising demand. We expect to see a shift in protection products to focus more on “advanced medical treatments” and more variation in cancer and CI products as customers age.
By 2025, Taiwan will have a super-aged society with more than 20% of the population estimated to be over 65 years old. Based on the forecast of the Taiwan government, by 2045 Taiwan will be the country with the third largest aging population percentage in the world, just behind Japan and Korea.
So, what type of insurance products are suitable for the aging population in Taiwan? There are two key opportunities: 1) products for retirement income, and 2) products specifically designed for seniors. The upcoming IFRS 17 and ICS regulations will also impact product design, where products are expected to be shorter term and less guaranteed.
In regard to senior products, the traditional mindset was that senior products must be expensive with strict underwriting, making them neither customer friendly nor easily accessible. This is a misperception. RGA launched Taiwan’s first senior product in 2022 to great success. The product was specifically designed with seniors in mind, with less-strict underwriting. We’ve also shifted our approach to distribution channels and explored new options for the product. We observed that around 20% of these products were purchased by the children of the seniors.
We expect that life insurers will develop products specifically designed to meet demographic changes such as Taiwan’s aging population. This may include differentiated coverage for different stages of cancer, products that provide advanced medical coverage, multiple cancers coverage, and impaired annuities that offer higher regular income payments than standard annuities.
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