Fubon Life Insurance Co. Ltd.

The negative outlook on Fubon Life Insurance reflects the likelihood the insurer could see reduced growth in its capital and earnings over the next two years. This is likely given the prolonged low interest rate environment and if the global capital markets experience continuous shocks in the coming quarters due to uncertainties over economic recovery and the containment of COVID-19. The outlook also reflects the likely increase in the insurer's risk exposures, especially foreign exchange risk, beyond the domestic industry average if not properly controlled. We believe Fubon Life Insurance should be able to uphold its market competitiveness locally. We also expect the insurer will continue to dominate the overall group credit profile of Fubon Financial Holding Co. Ltd. (Fubon

...We expect Fubon Life Insurance to maintain its franchise, established distribution channels, and market share locally. Fubon Life Insurance Co. Ltd. has broad business diversity and a well-diversified customer base and direct agent force nationwide compared to the industry average. The benefits associated with the insurer's franchise and channels are demonstrated by its better-than-average expense ratio which is in line with that of large-sized peers. We do not expect Fubon Life Insurance's competitive position in the local market to change over the coming two to three years. Fubon Life Insurance should continue to show better earning resilience than its peers. The insurer's earnings in terms of return on average assets have been consistently better than that of its peers. Fubon Life Insurance has better interest surpluses than the industry average, given its lower burden from negative spread and better investment gains, and its mortality surplus over non-linked liability ratio also compares...

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