FUBON FORECASTS CONTINUED PROFITS DESPITE SHRINKING TAIWAN MARKET

Taiwan’s largest insurer has predicted it will continue to maintain underwriting profitability during the next three years despite concern that the island’s insurance industry is set to shrink during the period. Record-breaking oil prices are stifling demand for motor cover in China and this is forecast to hit the insurance market on the island. However, Steve Chen, president of Fubon Insurance, Taiwan’s largest non-life company, said that despite high oil prices hitting the industry, he remained confident that his company would stay on track. “We are expected to return a combined ratio of around 90% for the next three years,” he said, adding that it was hoped that improved relations with China would boost the sector’s performance. A relaxation of investment rules is set to encourage more investment by Taiwanese firms in companies on the Chinese mainland. Chen also predicted that more cross-border merger and acquisition activity will take place across Asia as markets develop. This follows Fubon announcing its entry into the Vietnamese market earlier this year. Plans for the new subsidiary, Fubon Insurance (Vietnam), were first unveiled in a filing with the Taiwan stock exchange and the expansion was given approval in February. Fubon, which is investing around T$630m ($19.7m), in Vietnam will be the first Taiwanese non-life insurance firm in Vietnam to focus on fire, liability, cargo and engineering policies.