During its recent review of five insurance markets in Asia, only Taiwan and Singapore had their outlooks revised downward, S&P said in a report, titled Asia’s Insurance Industry Can Shake Off The Negative Effects Of The Recent Market Turmoil.
“The negative outlook on Taiwan’s life insurance market reflects our expectation of heightened uncertainties over life insurers’ operating performances and capitalization, which are likely to remain under pressure if the turmoil in the global capital markets and the slowdown in global economies persist,” S&P credit analyst Connie Wong (黃如白), wrote in the report.
Wong said the volatility in capital markets was also likely to constrain the growth momentum for investment-linked operations and further undercut local life insurers’ potential profits.
S&P said Taiwan’s major life insurers still have good liquidity and financial flexibility to withstand the current financial turmoil.
But if market conditions deteriorate, “the credit profiles of smaller or weaker life insurers without adequate capitalization and financial flexibility are likely to weaken,” Wong warned in the report.
RSS