Taiwan ILP market most attractive for Asia investors


The Taiwanese life insurance market has developed into an attractive investment opportunity for foreign asset managers looking to invest in Southeast Asia, Cerulli Associates Research revealed.

The report, which included surveys on China, Taiwan, Hong Kong, Korea, Singapore, Thailand, and Indonesia, highlighted that investment linked products (ILPs) continue to have a strong place in the market, Taiwan has the highest insurance penetration rate in the world at 18.9%.

Consequently, more than a third of respondents, the largest proportion, identified Taiwan as the market where they expect to see the most opportunity to manage ILP assets over the next 1-3 years.

“The retail market’s penchant for new and innovative funds, coupled with positive perceptions of the use of insurance products, helps ensure continued demand for ILPs,” says Manuelita Contreras, a senior analyst with Cerulli Associates who led the report.

On the institutional side, Cerulli Associates anticipates Taiwanese insurers diversify their investment portfolios following the regulators’ moves to relax restrictions on a number of investment activities, they are expected to achieve better investment efficiency and improved yield, however, stronger inflows from big playes will result in a reduction of outsourcing opportunities from asset-rich playes, Cerulli Associates predicts.

“The still-robust appetite for overseas investments continues to open some windows of opportunity for institutional asset managers,” says Yoon Ng, Cerulli’s Singapore-based Asia research director.