Foreign insurance companies buying Taipei buildings to put down roots

January 12, 2005

There has been a wave of interest in buying office buildings among foreign insurance companies in Taiwan. In the latest instance, Prudential Insurance Company of the United States took ownership of an NTD 3 billion office building on Nanjing East Road in Taipei City in November. ING Antai Life Insurance Company, Nanshan Life Insurance Company (a member of the American International Group) and Metropolitan Life Insurance Company are also reported to be pursuing similar real estate purchases.

ING Antai Life is searching for a suitable office building to purchase, but is also considering constructing its own building. While the option to construct would allow the company to design the building in accordance with its own style, it would require at least three years to complete. The insurer says it will decide whether to buy or build in 2005.

Nanshan Life Insurance bought an office building for NTD 2 billion this year and has plans to acquire another building.

Financial Supervisory Commission member Ling Bao suggests that this recent buying fever shows that insurance companies are in a good place financially and that they take a positive view of Taiwan's real estate market. The government's recent promotion of real estate securitization, Ling adds, has increased incentives for foreign insurers to invest in real estate in Taiwan as well.

Ling says Prudential's massive purchase has spurred other insurance companies to follow suit. The FSC member notes that, by demonstrating its determination to put down roots in Taiwan, Prudential has boosted the trust of Taiwanese consumers in the insurer. Other foreign insurance companies, in hopes of building this type of confidence, are also planning to buy buildings, says Ling.

A US insurer, understood to be Metropolitan Life Insurance, has stated that it will buy an office building in Taipei City as soon as it hires a good real estate appraisal firm.

Insurance Bureau director Wei Bao-sheng says that Lloyd's of London plans to open an office in Taiwan and will make an investigative trip here 2005. Lloyd's is reported to be planning to make Singapore its Asian insurance headquarters. Benfield, the world's leading reinsurance intermediary and risk advisory business, is also reported to be interested in getting set up in Taiwan.

The FSC's Ling says that the insurance market in Asia is developing in the direction of combining each national market into an integrated market.

(China Times)

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