Strong business franchise and market position Above-average operating performance Strong liquidity and financial flexibility Legacy burden of high guaranteed rate products Fierce market competition The ratings on Cathay Life Insurance Co. Ltd. (Cathay Life) reflect the company's strong business franchise and market position, and its above-average operating performance in the domestic market. The ratings also reflect the company's strong liquidity and financial flexibility. These positive factors are tempered by Cathay Life's legacy burden of high guaranteed rate in-force 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, as well as satisfactory profitability and adequate capitalization. Cathay Life accounted for 62% of
