Taiwan Insurance Institute: Market Recovery Boosts Optimism for Auto Insurance to Continue Driving Premium Growth

(CNA, Taipei, June 7, by reporter Lu Yen-tzu) The Taiwan Insurance Institute (TII) has released its latest non-life insurance market overview, indicating that the two main growth drivers for the overall gross written premiums in Taiwan's non-life insurance industry last year were engineering and auto insurance, with annual increases of 37.6% and 3.1%, respectively. It is expected that this year, as market purchasing power recovers, coupled with rising new car prices and increased public risk awareness, auto insurance will continue to drive overall premium growth.

The TII releases its non-life insurance market overview report twice a year, explaining the overall economic situation and the financial and business status of Taiwan's non-life insurance industry. The latest report, released in early June, reviews last year's premium growth and claims expenditures.

The report states that last year, the total gross written premiums for Taiwan's non-life insurance industry amounted to NT$286.8 billion, an increase of approximately NT$15.4 billion, or 5.7%, compared to the previous year. This was mainly attributed to increased premium income from other property insurance and auto insurance.

The report explains that for auto insurance, faced with high vehicle prices and accident compensation costs, public insurance awareness has increased, allowing auto insurance premiums to maintain growth. The growth driver for engineering insurance, within other property insurance, came from business in offshore wind power, construction and installation for high-tech factories, and power plant renewal and reconstruction projects, which boosted premiums.

Observing the data by insurance type, auto insurance premium income was approximately NT$139.4 billion, accounting for about 48.6% of the non-life industry, an annual increase of 3.1%. Within this, voluntary auto insurance premium income was about NT$119.5 billion, representing about 41.7% of the industry, with premiums increasing by 3.6% compared to the same period last year. Compulsory auto insurance premium income was about NT$20 billion, accounting for 7.0%, an annual increase of 0.2%.

For other property insurance, liability insurance premium income was about NT$21.4 billion, an 8.1% increase from the same period last year. Engineering insurance premium income was about NT$23.1 billion, a 37.6% annual increase. Guarantee insurance premium income was about NT$19 billion, a 1.7% annual decrease. Aviation insurance premium income was NT$1.4 billion, level with the same period last year.

The report also mentions that, considering non-life insurance companies all use reinsurance to diversify risks for stable operations, the increase in retained premiums is more noteworthy. This refers to the premium income for which the insurer ultimately bears the risk after cessions to and from reinsurers. According to statistics, the total retained premiums for the non-life insurance industry in 2025 were NT$203.2 billion, an annual increase of about 5.9%, with the retention ratio at 68%, up about 0.4 percentage points from the previous year.

Regarding claims, the report explains that last year, total insurance claims for Taiwan's non-life industry were NT$125.8 billion, an increase of NT$9.4 billion, or 8.1%, from the same period last year. This was mainly due to the 6.4 magnitude earthquake in Dapu Township, Chiayi County on January 21, which caused business interruption losses for several high-tech companies in the Southern Taiwan Science Park, leading to an increase in fire insurance claims.

The report states that although there were disasters last year, such as the Chiayi Dapu earthquake in January and severe losses to agriculture, forestry, and fishery across Taiwan from strong winds and heavy rain brought by Typhoon Hagibis in September, the non-life insurance industry as a whole remained stable and profitable in its core business and investments. In terms of investment performance, last year's investment income was about NT$11.5 billion, an annual increase of about NT$0.6 billion, and the overall comprehensive income was NT$30.5 billion, an annual increase of about NT$6.3 billion.

Looking ahead to 2026, the report predicts that growth in overall premium income for Taiwan's non-life insurance industry is promising. As the political and economic situation becomes clearer, and with economic recovery driven by AI technology and semiconductor exports, along with continued policy subsidies, overall market purchasing power has recovered. In the automotive sector, the industry forecasts total new car sales to reach 440,000 units this year, an annual increase of about 6.1%. With new car prices rising annually, higher repair costs, and increased public risk awareness, auto insurance is expected to continue driving the overall growth of the non-life insurance industry.

Regarding investments, the report believes that the market environment has tempered fears of a sharp recession triggered by tariffs, and the overall investment environment is developing positively. However, some risks remain, such as a deteriorating labor market, rising inflation, doubts about the independence of the US Federal Reserve, and the susceptibility of AI-related companies to sharp corrections due to market sentiment, all of which require constant vigilance. (Editor: Su Chih-tsung) 1150607