Chubb Life to focus on steady profit in Asia

This is supported by stable business growth and risk control in Hong Kong market.

Chubb is unlikely to divest its interest in Chubb Life, albeit a strategically important subsidiary, it mainly focuses on its property and casualty business. However, it considers life insurance, particularly in Asia, as an engine for earnings growth, S&P Global Ratings said.

Chubb Life will likely remain a stable, yet moderate, profit contributor to the group's life insurance operations.

S&P Global Ratings assesses Chubb Life's capital and earnings as satisfactory. Despite a capital buffer at the 99.80% confidence level, adjustments are made due to the insurer's modest scale and sensitivity to interest rate volatility. 

Higher interest rate risk charges have reduced its capital buffers under our revised capital adequacy framework. This impact is mitigated by recognising diversification benefits and higher total adjusted capital (TAC) from the removal of haircuts to value-in-force.

The stable outlook reflects S&P Global’s expectation that Chubb Life will maintain disciplined, profitable business growth and remain strategically important to the Chubb group over the next two years. 

Chubb Life is expected to maintain satisfactory capital and earnings through 2026, supported by disciplined business growth and prudent risk controls in the competitive Hong Kong market. 

However, an increasing allocation to equity investments might impact its capital buffer. The insurer's modest capital size is sensitive to market fluctuations and business expansion needs. 

Adequate risk controls and a significant portion of profit-sharing liabilities mitigate exposure to credit and market risks. Chubb Life may also receive capital support from the parent group if needed.

The insurer plans to grow its market presence whilst maintaining profitability, expanding its distribution force, and leveraging partnerships to enhance customer base diversification. 

However, its distribution capability is modest compared to major players like HSBC Life, BOC Group Life Assurance, and Hang Seng Insurance.

Chubb Life's profits might be more volatile than its larger peers due to greater sensitivity to interest-rate fluctuations.