Cathay Life rebounds as capital worries linger

Net income reached $0.5b after a $0.6b loss a year earlier.

Cathay Life is on track to meet its 2026 contractual service margin (CSM) target after reporting strong new business growth and improved earnings in the first quarter, although concerns remain over its capital position and foreign exchange exposure.

The insurer generated $0.8b (TW$27.1b) in new business CSM in the first quarter, representing 36% of its full-year target of $2.3b (TW$75b).

CreditSights said the result, driven mainly by health and accident products, indicates that the company is broadly on track to achieve its goal. Total CSM increased to $16.5b (TW$532.4b) at the end of March.

Cathay Life reported net income of $0.5b (TW$17.4b) in the first quarter, reversing a net loss of $0.6b (TW$18.6b) a year earlier.

The improvement came during the insurer’s first reporting period under IFRS 17.

Its insurance service result rose 36.8% year-on-year to $0.4b (TW$11.7b), supported by $0.3b (TW$9.2b) of CSM and risk adjustment releases.

Financial results contributed $0.4b (TW$11.8b), reflecting recurring investment income of $2.1b (TW$66.2b), offset by hedging and insurance finance expenses.

Despite the positive operating performance, analysts said foreign exchange risks continue to warrant close monitoring.

Under a new accounting framework introduced in January 2026, unrealised foreign exchange gains and losses on amortised-cost bonds are deferred and amortised over the remaining life of the assets.

Cathay Life reported a deferred balance of $1.3b (TW$43.4b) at the end of the first quarter, representing unrealised losses.

($1.00 = TW$31.75)