An explore on capital allocation and profitability for taiwan life insurance companies

Life insurance industry has the mechanism of modulating and stabilizing the entire financial industry. The performances of life insurance industry often affect the overall economical development. The maturity of investment concepts and the liberalization of investment on insurance industry of the government policies in recent years have created a profitable environment for investment. Under the responsibility to the policyholders, the performances and operational capability are the important evaluation indexes to evaluate whether life insurance companies stay stable and profitable. This research evaluates the profitability of 28 Taiwan life insurance companies from year 2003 to 2005. We cluster life insurance companies into three groups by seven profitability indexes, and find there are significant differences in capital allocation and operational capability, at the end we analyze and compare the diversities between these three groups.