Cathay Financial to stay resilient despite earnings drop: Moody’s

Cathay Life is projected to retain its lead in Taiwan's life insurance market.

Cathay Financial Holding and its insurance units are expected to maintain stable capital and earnings over the next 12 to 18 months despite market volatility and FX risks, according to Moody’s Ratings.

Cathay Life is projected to retain its lead in Taiwan's life insurance market, supported by its strong agency force and shift toward protection-focused products. 

However, its earnings and capital remain exposed to market swings, with 14% of its invested assets in unhedged foreign holdings.

Earnings dropped 59% year-on-year to $550M (TW$16.1b) in the first five months of 2025 due to lower realised gains and FX losses. 

The insurer's capital ratio remained above 300% as of end-April, helped by increased hedging and reserve releases.

Cathay Century is also expected to maintain strong capital and stable earnings. Its RBC ratio stood at 365% at end-2024, with a combined ratio of 91%. 

Whilst catastrophe and tail risks persist, reinsurance arrangements are in place to manage them.