Pretax Profit of NT$397.7 Billion in First Three Quarters, Different Bases Under New System Make Comparison Difficult
The FSC announced that pretax profit of the insurance industry for the first nine months of this year was NT$397.7 billion. IFRS 17 has applied since this year, while the same period last year was calculated under IFRS 4 at NT$117.7 billion. 蔡火炎, Deputy Director-General of the Insurance Bureau, said the drivers of the profit change are difficult to compare directly due to the different accounting bases. Of this, pretax profit of the life insurance industry for the first nine months was 3523億元, mainly from an insurance service result of 1580億元, a financial result of NT$267.6 billion, and other operating results of negative NT$14.4 billion; pretax profit of the non-life insurance industry for the first nine months was NT$45.4 billion, mainly from an insurance service result of NT$33.6 billion, a financial result of NT$16.2 billion, and other operating results of negative NT$7.2 billion.
Four Foreign-Exchange Buckets Reach NT$1.1109 Trillion, Full Structural Disclosure
The FSC revised the foreign exchange price variation reserve framework in February this year, expanding it into four buckets: fluctuation reserve P, fixed reserve Q, special surplus reserve for fixed foreign-exchange risk provision X, and enhanced reserve Y. At the end of September, the balance of the foreign exchange price variation reserve was NT$745.8 billion, including P at 6584億元 and Q at NT$87.4 billion; special surplus reserve was NT$365.1 billion, including X at NT$365.1 billion and Y at 0, for a combined total of NT$1.1109 trillion. In September the NT dollar depreciated 1.3% against the US dollar from end-2025, and the cumulative balance of foreign-exchange reserves increased by 1321億元 from the end of last year, with exchange gains/losses, hedging gains/losses and net changes in foreign-exchange reserves totaling negative NT$204.6 billion.
Extreme Scenario Can Buffer 11.9% Appreciation, Resilient to NT$28.05
At the end of September, net foreign investment exposure of the life insurance industry was NT$9.3286 trillion. Based on the combined NT$1.1109 trillion in foreign-exchange reserves and special surplus reserve, under an extreme scenario where all foreign investments are repatriated, it could buffer an 11.9% appreciation of the NT dollar. Calculated at the end-September exchange rate of NT$31.85 per US dollar, this equals about NT$3.8, resilient to an appreciation of the NT dollar to NT$28.05. On a monthly basis, the exchange rate at end-September depreciated 0.58% from end-August, and the foreign-exchange hedging ratio of life insurers fell to 40.95%, with currency swap (CS) transactions slightly above 75% and non-deliverable forward (NDF) transactions slightly below 25%.
Life Net Worth at NT$4.4428 Trillion, Up NT$44 Billion in Single Month
At the end of September, net worth of the life insurance industry was NT$4.4428 trillion on an IFRS 17 basis, versus NT$2.645 trillion in the same period last year on an IFRS 4 basis, mainly due to remeasurement of insurance contract liabilities, redesignation of financial assets, and accumulated profits. Monthly net worth increased by NT$44 billion from the prior month, mainly from a NT$12.9 billion increase in single-month pretax profit, a NT$15.8 billion increase in other comprehensive income, and a NT$16 billion capital increase by 三商美邦人壽. For single-month profit, the life insurance industry posted pretax profit of NT$13.9 billion in September, including an insurance service result of NT$18.7 billion, a financial result of NT$3.8 billion and other operating results of negative NT$9.8 billion; the non-life insurance industry posted pretax profit of NT$4.1 billion in September, including an insurance service result of NT$4 billion, a financial result of NT$0.9 billion and other operating results of negative NT$0.9 billion.