Moody’s upgrades Taiwan’s Cathay Life

December 7 2015 by InsuranceAsia News Staff

Cathay Life’s structural improvement in its profitability was among the reasons that prompted Moody’s Investors Services to upgrade the Taiwanese insurer’s insurance financial strength rating (IFSR) from Baa2 to Baa1, with stable outlook.

In a statement posted on its website, Moody’s said the upgrade reflects Cathay Life’s solid capitalisation position, strong and sustainable business profile, as well as the structural improvement in its profitability.

Cathay Life’s capital adequacy stood at 5% at the end of the third quarter, according to Moody’s.

According to the ratings rationale penned by analyst Stella Ng, Cathay Life’s return on capital has increased sharply since 2013, with the annualised ROC as of the third quarter above 10%.

The insurer’s profitability ratio also went up in the third quarter due partly to improving interest spread income.

Cathay Life, according to Moody’s, is the market leader by premiums in Taiwan’s insurance market, largely contributed by its strong agency force.

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