AM Best has maintained its stable outlook on Taiwan’s non-life insurance segment, noting that premium growth prospects remain robust and are supported by steady economic conditions and strong insurance demand.

Also underpinning the stable outlook, as detailed in the Best’s Market Segment Report, “Market Segment Outlook: Taiwan Non-Life Insurance”, are insurers’ healthy operating profitability in 2024 and regulatory initiatives that support improvements in underwriting strategies.

According to the report, Taiwan’s non-life segment achieved double-digit growth in direct premiums written during the first half of 2025, continuing the growth momentum of the past two years. Despite concern about rising tariffs, economic growth has remained resilient. “While Taiwan should continue to benefit from its leading position in the manufacturing of AI-related products, uncertainties in global demand and U.S. trade policy, especially for the technology sector, cloud the outlook,” said Madison Fan, financial analyst, AM Best.

Exposure to natural catastrophes, which can create volatility in underwriting results, and capital market disruptions and exchange rate fluctuations also partially offset the market positives.

The report states that Taiwan’s non-life industry recorded good underwriting margins over the past two years, with the average return-on-equity (ROE) ratio in 2024 reaching 16%. Following the adverse pandemic losses, the industry players have strengthened their underwriting strategies. Additionally, regulatory updates for electric vehicle (EV) motor insurance and medical insurance are supportive of improving the quality of underwritten risks.

Taiwan’s insurance industry will simultaneously roll out its new generation solvency regime, known locally as TW-ICS, alongside the adoption of IFRS 17 by 2026. Under the new solvency regime, insurers are required to use fair value measurements for assets and liabilities to provide a more-realistic basis for assessing financial strength and risk exposure. Non-life insurance companies’ net assets reported under IFRS 17 are not expected to deviate significantly compared with IFRS 4, while assets and liabilities are expected to moderately decrease.

“While the transitions to new accounting and solvency standards may bring additional operating costs over the short term, AM Best-rated non-life companies are not likely to face solvency pressure under the upcoming new solvency regime,” said James Chan, director, analytics, AM Best.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=359414.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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