Operating Report
2022 started off with a shock as war broke out between Russia and Ukraine, which disrupted the global supply of energy and raw materials while the supply chain strain and resurgence of COVID-19 variants persisted throughout the first half. The situation was compounded by the aggressive rate hikes and tightened monetary supply across major economies in an attempt to contain inflation, which ultimately impacted global trade, increased downside risks of the global economy, and suppressed domestic investments and exports. As the Russia-Ukraine war dragged on to the second half of 2022, expectations for worldwide inflation and rate hike remained high, and commodity trade slowed down to the point where global economic outlook turned grim. With regards to the domestic economy, trade and consumption activities increased due to the release of new high-tech consumer electronics and resumption of normal lifestyle; however, stock market performance was negatively affected by the slowdown of the global economy and loss of terminal demand. According to the Directorate General of Budget, Accounting and Statistics, Executive Yuan, Taiwan's economic growth rate for 2022 was estimated at 2.43%, down 4.1 percentage points from the 6.53% in 2021.
Industry-wise, the non-life insurance industry posted total written premiums of NT$220.3 billion in 2022, up 6.58% from the NT$206.7 billion in 2021. The Company managed to generate NT$7.905 billion of written premiums in 2022, which represented a 5.99% growth over the NT$7.458 billion in 2021. Below is a breakdown of the Company's 2022 business performance:
1. Business aspect
Fire insurance:
Premium revenues amounted to NT$1,106,142 thousand and accounted for 13.99% of total premium revenues, representing a 6.28% growth over the NT$1,040,736 thousand recorded in 2021. Retained loss ratio was calculated at 31.90%.
Marine insurance:
Premium revenues amounted to NT$415,702 thousand and accounted for 5.26% of total premium revenues, representing a 10.88% growth over the NT$374,904 thousand recorded in 2021. Retained loss ratio was calculated at 46.79%.
Auto insurance:
Premium revenues amounted to NT$5,423,478 thousand and accounted for 68.61% of total premium revenues, representing a 4.84% growth over the NT$5,172,879 thousand recorded in 2021. Retained loss ratio was calculated at 58.98%.
Other insurance:
Premium revenues amounted to NT$959,628 thousand and accounted for 12.14% of total premium revenues, representing a 10.32% growth over the NT$869,881 thousand recorded in 2021. Retained loss ratio was calculated at 50.10%.
2. Financial aspect
Total assets amounted to NT$17.654 billion by the end of 2022, which was NT$793 million higher than the NT$16.861 billion reported at the end of 2021 and was mainly due to the increase of other financial assets. Total liabilities amounted to NT$10.091 billion, which was NT$501 million higher than the NT$9.59 billion reported at the end of 2021 and was due mainly to the increase of insurance liabilities.
From a global perspective, inflation has leveled but remains relatively high, and further rate hikes from major central banks may put economic activities and asset prices deeper into a downward spiral; meanwhile, the surge of COVID-19 cases in China following the discontinuance of disease control measures combined with its struggle with the U.S. causes global supply chains to shift and restructure at a faster rate; lastly, increasing frequency and impact of weather anomalies present uncertainties to the global food supply, for which research institutions have placed economic growth estimates at the range of 1.5%-2.7% worldwide for 2023. From a domestic perspective, external factors such as contractionary monetary policies in major economies, ongoing war between Russia and Ukraine, significant slowdown of the global economy, and technological competition between China and the U.S. have significantly limited Taiwan's export performance. However, the recovery of private consumption combined with ongoing capacity expansion by semiconductor manufacturers, increased public infrastructure spending, construction of green energy facilities, and extension of “Three Major Programs for Investing in Taiwan” should provide strong support for domestic demand. Leading organizations forecast that Taiwan's economic growth rate would range from 0.9% to 3.30% this year, which appears to be stable. In response, the Company shall continue focusing on its core business activities while at the same time explore improvements with a focus on stability, pragmatism, and innovation. In terms of asset allocation, the Company will strive to raise capital efficiency and asset yields as a show of gratitude for the support of our shareholders.
Lastly, we would like to give you our best regards for the future ahead.