Union Insurance Co. Ltd.

The stable outlook on Union Insurance reflects our expectation that the insurer will maintain its very strong capital and earnings over the next one to two years. In addition, we believe Union Insurance will sustain its underwriting performance in line with the industry average over the period, given the insurer's satisfactory underwriting performance on personal line insurance as well as its development in commercial line insurance with adequate underwriting skills and reinsurance arrangements. The insurer is also likely to maintain a moderate investment risk appetite with controlled exposure to equities over the same period. We may lower the ratings on Union Insurance if the insurer's financial risk profile deteriorates significantly, possibly due to an aggressive increase in investment risk appetite,

...We expect Union Insurance to sustain its market presence in key product lines. In our view, Union Insurance Co. Ltd. will likely maintain its market position and competitiveness in personal lines, including motor and residential fire business in the domestic market over the next one to two years. However, we believe the insurer remains less geographically diverse than its regional peers. We expect the insurer's operating performance to be about the domestic norm. Union Insurance's operating performance is likely to remain satisfactory, which is about the industry norm in Taiwan, over the coming two years. This is underpinned by the insurer's more selective business strategy, prudent underwriting controls, and adequate reinsurance arrangements. Capitalization to remain a strength. We assess Union Insurance's capitalization as excellent and unlikely to weaken over the coming two years based on our risk-based capital model. The insurer's satisfactory operating performance and prudent capital...

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