Skip to content
Subscriber Only

Taiwan, World's Most Insured, Allows Derivatives for Risky Cover

  • Insurers can hedge risks tied to investment-linked policies
  • Rule change seeks to develop island's variable annuity market

Asian investment banks scouting for extra revenue may want to look at Taiwan. The world’s most insured nation is opening up some of its riskier business to the region’s derivatives providers.

The island’s watchdog is easing rules so insurers can use derivatives to hedge risks arising from the sale of investment-linked policies, according to a statement from the Financial Supervisory Commission. The change aims to boost local sales of variable annuities -- policies that can offer buyers returns in retirement linked to the performance of funds -- to cater for the needs of an aging population.