(Bloomberg) -- Taiwan’s top financial holdings companies struggled to mitigate the costs of Covid-19-related insurance policy claims that ate into profits and left investors assessing heavy misses to their projected earnings. 

Fubon Financial Holding Co. and Cathay Financial Holding Co. shares dipped in Wednesday trading in Taipei after revealing pre-tax earnings that fell short of analyst estimates. 

While Covid-related policies were seen as a growth generator when Taiwan initially saw some success in containing the spread of the virus, they became a large burden as the omicron variant breached the island’s border controls. Insurers in Taiwan that had raised capital to create buffers in anticipation of more claims are also facing headwinds from rising interest rates and declining equity markets.  

In Taiwan, claims can be made for positive Covid test results and side effects incurred as a result of vaccination as well as suffering from the disease. Some 70% of Covid-related policies were claimed in 2022, with the total payout surpassing NT$211 billion ($6.9 billion), according to data provided by the Financial Supervisory Commission.

Fubon Financial Holding reported pre-tax profit of NT$60.6 billion for the full year on Tuesday, while Cathay Financial’s came in at NT$50 billion.

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