Determinants of the investment-linked insurance in Taiwan
Date Issued
2014
Date
2014
Author(s)
Chang, Che-Hao
Abstract
Taiwan’s investment-linked new insurance premium saw a rapid growth since 2003. The investment-linked insurance new insurance premium reached peak in 2007, where the investment-linked new insurance premium as a percentage of total life insurance new premium reached 62%. However affected by financial tsunami in 2008, the investment-linked new policy premium as a percentage of total life insurance new premium experience a significant decrease to 35%. And for the period of 2009~2012, the percentage continued to fall. This paper investigated the factors that affect the investment-linked insurance in Taiwan. We used 12 insurance companies’ investment-linked new insurance policy’s face value as explained variable, and used panel data’s fixed effect model and random effect model in analysis. We used insurance companies’ equity value、average income per capita、saving rate、one year term deposit rate of five largest banks、USD/NTD exchange rate、MSCI world stock index、J.P. Morgan Global Aggregate Bond Index and the number of domestic and foreign funds as explanatory variables. Finally, we examined if the effect on the domestic and foreign insurance companies are different. The empirical results shows that there is a positive correlation between average income per capita、USD/NTD exchange rate、MSCI world stock index and the number of domestic and foreign funds with investment-linked insurance. Whereas saving rate、one year term deposit rate of five largest banks、and J.P. Morgan Global Aggregate Bond Index are negatively correlated with investment-linked insurance. Furthermore, both domestic and foreign insurance companies are positively affected by average income per capita and USD/NTD exchange rate, and negatively affected by the saving rate. Only domestic insurance companies are positively affected by MSCI world stock index, and negatively affected by J.P. Morgan Global Aggregate Bond Index. The number of domestic and foreign funds have only positive effect on the foreign insurance companies.
Subjects
Investment-linked insurance
panel data
fixed effect model
random effect model
Type
thesis
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