Union Insurance Co. Ltd.

The stable rating outlook on Union Insurance reflects our view that the insurer will maintain very strong capital and earnings over the next one to two years. The insurer is likely to maintain an underwriting performance in line with its domestic peers over the same period. This is supported by the satisfactory underwriting performance of its personal line insurance and the development of its commercial line insurance with adequate underwriting skills and reinsurance arrangements. We forecast Union Insurance will keep a moderate low investment risk appetite with controlled exposure to equities over the next one to two years. We could lower the ratings on Union Insurance if the insurer's financial risk profile deteriorates significantly, possibly due to an aggressive increase

... likely trend back to about the domestic norm in 2023-2024. We view Union Insurance Co. Ltd.'s weaker underwriting performance in 2022 as a one-off due to a surge in COVID-19 related claims. We expect the insurer's operating performance to remain satisfactory and close to the domestic average over the next two years. We believe the insurer can uphold its underwriting skills and quality and maintain prudent risk retention over the same period. Capital remains a solid credit strength. Our risk-based capital model indicates that Union Insurance's capital adequacy is excellent with a good buffer for potential losses, which is unlikely to weaken over the next two years. The insurer's satisfactory operating performance and prudent capital management support this view. The insurer has maintained its market presence in key product lines. We anticipate Union Insurance will retain its competitiveness in commercial and personal lines in Taiwan's property...

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