The ratings on Cathay Life Insurance Co. Ltd. reflect the insurer's very strong market position in the domestic life insurance market, as well as the company's very strong liquidity and investment profile. Counterbalancing factors include the sensitivity of its capitalization to the external investment environment and the difficulties Cathay Life faces in enhancing its profitability under the current low interest rate environment. In addition, as the flagship entity of the Cathay Financial Holding Co. Ltd. (Cathay FHC; BBB+/Stable/A-2; cnA+/cnA-1) group, Cathay Life may be required on a regular basis or in exceptional circumstances to provide surplus resources to support other group members. Cathay Life is the main earnings contributor of the Cathay FHC group, which has a very strong domestic
