Asia Pacific composite insurers exceed profitability standards

Their Fitch-calculated financial leverage ratios stay adequate with their ratings.

Asia Pacific’s composite insurers show profitability metrics in line with or better than the ratio guidelines for corresponding IFS Ratings, Fitch Ratings said.

All insurers in the peer group have issued debt instruments to support their regulatory capital profiles. Their Fitch-calculated financial leverage ratios remain commensurate with their ratings.

Fitch Ratings ranks the company profiles of China Taiping Insurance (TPG), Etiqa, Sunshine Life Insurance (SLI) and Sunshine Property and Casualty Insurance (SPCI) as ‘Favourable’ compared with that of other insurers in their corresponding markets. 

Their company profile scores are commensurate with their Insurer Financial Strength (IFS) Ratings. Asset Risks Drive Capital Assessment: 

Fitch’s assessment of these insurers’ capitalisation ranges from ‘Very Strong’ to ‘Good’. TPG’s ‘Good’ capitalisation constrains its IFS Ratings due to high investment risk from risky-asset exposures. 

The ratings agency also expects SLI to maintain its large holding of high-risk assets for better yield in light of China's low interest-rate environment, which could challenge SLI’s and SPCI’s consolidated capitalisation amid volatile capital markets. 

In contrast, Etiqa’s limited asset risks support the group’s ‘Extremely Strong’ Prism Global score.