Taiwan Life to maintain operating results, capital

It is expected to maintain good capital buffers to support business expansion.

Taiwan Life is expected to sustain its favourable operating results and strong capital buffer amidst its asset management strategy and product mix, according to a Fitch Ratings report.

The insurer is forecasted to maintain good capital buffers to underpin its business expansion. Its risk-based capital ratio was 310% at the end of 2020 and its capital score, as measured by Fitch's Prism Model, remained “adequate” at end-2020 and end-2019, supported by growth of value of business in-force and various loss-absorbing reserves. 

Taiwan Life's pre-tax return on assets averaged 0.7% from 2018 to 2020, bolstered by mortality and morbidity gains. Its asset risk has also fallen due to growth in shareholders' equity and reduction in investment in below-investment grade bonds, the report said. 

The insurer currently has a “favourable” business profile versus other life insurers in the market due to its operating scale, well-diversified distribution channels and product lines, and substantive business franchise, the report concluded.