Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s, yesterday revised its outlook on the long-term credit ratings of Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控) from “negative” to “stable” in the wake of a criteria change.
It recently modified the methods used to grade the capital strength of insurers, insurance groups and core subsidiaries, Taiwan Ratings said in a statement.
Life insurance subsidiaries factor heavily on the capital and financial strength of Cathay Financial and Shin Kong Financial.
“The outlook revisions reflect our view that the industry pressures on our ratings on Taiwan life insurers have moderated,” Taiwan Ratings said, adding that the probability of a downgrade has dropped to less than one-in-three.
Cathay Finanical’s market position in Taiwan’s competitive financial market is strong, thanks to its extensive retail customer base and well-established franchise in the life insurance sector, the statement said.
Cathay Life Insurance Co (國泰人壽), the flagship unit of Cathay Financial, is the largest player in Taiwan’s life insurance market by total assets and premiums, with about 25 percent market share.
Shin Kong Financial owes its satisfactory risk profile to the competitive position of its flagship unit, Shin Kong Life Insurance (新光人壽), which ranks as the No. 4 life insurer in the local market, the statement said.
Taiwan Ratings also affirmed its “twAAA” long-term credit and insurer financial strength ratings on non-life insurer MSIG Mingtai Insurance Co (明台產險), with a stable outlook.