Strong business franchise and market position Above-average operating performance Strong capitalization, liquidity, and financial flexibility Legacy burden of high guaranteed rate products The ratings on Cathay Life Insurance Co. Ltd. (Cathay Life) reflect the company's strong business franchise, market position, capitalization, liquidity, and financial flexibility. They reflect its above-average operating performance. These positive factors are partly offset by the challenges that Cathay Life faces in expanding its business amid fierce domestic competition, as well as the company's legacy burden of high guaranteed rate products. Cathay Life is the flagship company and main earnings contributor of the Cathay Financial Holding Co. Ltd. (Cathay FHC, A-/Stable/A-2) group, which has a strong market position, balanced business development, satisfactory profitability, and adequate capitalization. Cathay
