UNSERVED MARKET:
The insurance firm’s proposal to establish an online unit under new rules was the only such application it had received, the commission said
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By Kao Shih-ching / Staff reporter
The Financial Supervisory Commission (FSC) on Thursday rejected CTBC Insurance Co’s (中國信託產險) application to establish a Web-only insurance company, citing weak innovation and low feasibility.
CTBC submitted the application in October last year, after the commission announced the legal framework for Web-only insurance businesses at the end of 2021.
Similar to Web-only banks, virtual insurers cannot have brick-and-mortar offices, and are only allowed to sell products and services online, the commission said.
Photo: Kelson Wang, Taipei Times
Insurance Bureau Deputy Director Lin Chih-hsien (林志憲) said the commission recognized CTBC’s effort to introduce financial technology and innovative marketing in its plan to launch a virtual insurance business.
However, the commission’s review committee assessed the applicant’s innovation as not strong enough, and determined that its business model could be easily replicated, which could make it difficult to differentiate it from conventional property insurers, denying the company to find a niche in the local market, Lin said.
Furthermore, CTBC offered a financial forecast in its application, but the review committee was unconvinced by its profit estimates, he added.
“It is acceptable that the Web-only company would stay in the red initially, but we find its forecast of turning profitable in five years too optimistic,” Lin said.
As a result, the committee rejected the application after discussing it in six meetings, he added.
The FSC has received no other applications for Web-only insurance businesses, Lin said, adding that it would evaluate whether to initiate another round of solicitation for virtual insurers at the end of this year.
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