Regulatory risk-based capital ratios remained comfortably above the minimum requirement of 200%.
According to Fitch Ratings, Cathay Life and Fubon Life have been assessed with the most favorable company profiles among life insurers in Taiwan, owing to their robust market presence, substantial operational scales, and diversified product portfolios and distribution channels. Other insurers included in the peer review were categorized as ‘Favorable’.
All members of the peer group received Fitch Prism Model scores ranging from ‘Adequate’ to ‘Strong’. To mitigate capitalization volatility resulting from interest rate fluctuations, some insurers have opted to reclassify assets to amortized costs.
These insurers’ regulatory risk-based capital ratios continued to exceed the 200% minimum requirement.
The upcoming localised Insurance Capital Standard (TW-ICS), scheduled for introduction in 2026 concurrently with IFRS 17, will feature a 15-year phase-in period mandated by the Financial Supervisory Commission (FSC). This phase-in period aims to assist insurers in adjusting their asset allocations and addressing potential capital shortfalls.
Fitch anticipates that life insurers will maintain their issuance of bonds, both domestically and internationally, to bolster their regulatory capital adequacy under TW-ICS.
Insurers are expected to leverage the expanded funding avenues provided by the FSC, enabling them to issue capital-qualified subordinated bonds via overseas Special Purpose Vehicles (SPVs).
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