Chung Kuo Insurance Co. Ltd.

The stable rating outlook reflects our view that Chung Kuo Insurance will maintain its very strong financial risk profile over the next one to two years, as well as a prudent investment strategy and manageable forex risk exposure. We believe the company will gradually restore its underwriting performance to the pre-pandemic level over the next two to three years. We also expect the parent group to remain supportive of the insurer's capital adequacy should Chung Kuo Insurance encounter major losses. We could lower the ratings on Chung Kuo Insurance if: The insurer's capital and earnings deteriorate substantially from the current very strong level. This could result from higher losses from underwriting or reinsurance recoveries than we current forecast; or The

...Chung Kuo Insurance will likely maintain good competitiveness in Taiwan's commercial insurance market. We anticipate Chung Kuo Insurance Co. Ltd. will retain its competitiveness in the domestic market over the next one to two years, given our view of the sustainability of the insurer's overall credit profile by leveraging the client base and resources of the parent, Mega Financial Holding Co. Ltd. (Mega FHC) group. The insurer's capitalization will remain a strength in the post-pandemic insurance stage. We forecast Chung Kuo Insurance's capitalization will remain excellent in 2023-2024. This view is supported by the insurer's prudent financial management, potential capital support from the parent Mega FHC group, and prudent growth strategy. This is despite the insurer's capital buffer against volatility was smaller compared to the pre-Covid-19 level. Underwriting performance could rebound to the pre-pandemic level in 2024. Chung Kuo Insurance reported substantial losses in 2022 and in the...

Full Report