Tai­wan’s in­sur­ance pen­e­tra­tion tops the world: sta­tis­tics

The China Post - - LOCAL - BY JOHN LIU

Tai­wan’s in­sur­ance pen­e­tra­tion of 18.9 per­cent ranks No. 1 in the world, show­ing in­sur­ance prod­ucts’ great pop­u­lar­ity among the public, ac­cord­ing to sta­tis­tics re­leased by the gov­ern­ment.

The in­sur­ance pen­e­tra­tion rate mea­sures the share of in­sur­ance rev­enues in the over­all GDP in a coun­try. Hong Kong and South Korea, with a rate of 12.4 per­cent and 11.3 per­cent, rank No. 2 and No. 4, re­spec­tively.

The in­sur­ance in­dus­try raked in US$95.6 bil­lion last year, mak­ing Tai­wan the 11th most prof­itable place for the in­sur­ance busi­ness, said the Di­rec­torate-Gen­eral of Bud­get, Ac­count­ing and Sta­tis­tics (DGBAS, ).

The U.S. and Ja­pan have higher in­sur­ance rev­enues of US$1.28 tril­lion and US$ 479.8 bil­lion, re­spec­tively, but their in­sur­ance pen­e­tra­tion is not as high as Tai­wan’s.

In­sur­ance pen­e­tra­tion is in­flu­enced by the na­tional in­come level as well as the types of in­sur­ance pur­chased, ac­cord­ing to the Life In­sur­ance As­so­ci­a­tion of the R.O.C. ( ).

The en­dow­ment in­sur­ance and the vari­able life in­sur­ance usu­ally re­quire higher pay­ments, re­sult­ing in greater pur­chased in­sur­ance, the Life In­sur­ance As­so­ci­a­tion said, adding that Tai­wanese con­sumers pre­fer the en­dow­ment pol­icy.

The na­tion’s in­sur­ance den­sity of US$4,072, which is the av­er­age per capita in­sur­ance ex­pense, ranks No. 9 glob­ally, the DGBAS said. Swe­den’s US$4,027 takes the top spot.

In­sur­ance den­sity is a de­riv­a­tive of na­tional in­come level and the amount of in­sur­ance pur­chased, the Life In­sur­ance As­so­ci­a­tion said, adding that de­vel­oped na­tions tend to have higher den­sity than de­vel­op­ing na­tions.

A higher den­sity in­di­cates a su­pe­rior un­der­stand­ing of in­sur­ance con­cepts, while a lower rate sig­ni­fies greater un­tapped op­por­tu­nity for the busi­ness, the as­so­ci­a­tion added.

The na­tion’s fi­nance and in­sur­ance in­dus­try has re­al­ized much growth and logged record earn­ings in re­cent years. The prop­erty and life in­sur­ance sec­tor grew 5.1 per­cent in rev­enues in 2014, sub­stan­tially higher than the na­tion’s GDP growth.

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