Research Update: Chung Kuo Insurance Outlook Revised To Negative On Possible Weakening Parent Group Credit Profile; 'A-' Ratings Affirmed

Mega International Commercial Bank Co. Ltd. (Mega Bank) is the anchor for the Mega Financial Holding Co. Ltd. (Mega FHC) group credit profile, and the weakening trend for the bank's stand-alone credit profile could negatively affect the group credit profile over the next one to years. We view Taiwan-domiciled Chung Kuo Insurance Co. Ltd. as a strategically important entity to Mega FHC group and as such the ratings on the insurer are capped by the group credit profile. We have therefore revised the rating outlook on Chung Kuo Insurance to reflect the negative trend for the group credit profile. It also reflects the likelihood that we may lower our ratings on the insurer if the Mega FHC group credit profile

...Rating Component Scores Business Risk Profile Satisfactory Competitive position Satisfactory IICRA Intermediate risk Financial Risk Profile Very Strong Capital and earnings Very strong Risk exposure Moderately low Funding structure Neutral Anchor a- Modifiers Governance Neutral Liquidity Adequate Comparable rating analysis 0 Current Credit Rating Local currency financial strength rating A-/Negative/-- Foreign currency financial strength rating -- Local currency issuer credit rating A-/Negative/-- Foreign currency issuer credit rating --...

Research Update