, Taiwan
/Nayeli Leal Uh from Unsplash

Fubon Life’s investments raise volatility concerns

Its P&C segment’s profits and capitalisation over the next 12-18 months should remain stable.

Moody’s Ratings said that Fubon Life has presented a strong market presence, diversified channel mix, and consistent improvements in earnings quality.

These strengths are balanced by significant overseas and equity investments, which expose earnings and capitalisation to higher volatility compared to global peers. 

Despite these risks, Fubon Life remains the second-largest life insurer in the domestic market, with strong channels and an established franchise.

Earnings quality is expected to improve due to better product margins and reduced negative spread risk, as the insurer grows protection-oriented products and shifts towards regular-premium products with lower guarantees. 

However, high equity and real estate investments relative to its capital base make it sensitive to market volatility. 

The insurer's solid earnings and focus on less capital-intensive products support its business growth and help withstand capital market fluctuations. 

The risk-based capital (RBC) ratio was 336% at the end of 2023, well above the regulatory minimum of 200%. 

The stable outlook reflects expectations of maintained profitability and capitalization over the next 12-18 months.

On the other hand, it’s property & casualty (P&C) segment, Fubon P&C, has a highly liquid investment portfolio focused on bank deposits and fixed-income investments, with a diversified business mix. 

However, weak profitability and market position offset these strengths, with earnings likely to remain weak over the next 12-18 months due to limited expense ratio improvements and volatility in non-motor profitability. 

The stable outlook indicates expectations that market position and profitability will not significantly deteriorate, and support from major shareholders will remain unchanged.

Follow the link s for more news on

Join Insurance Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

APAC emerges as leader in renewables insurance
RE is projected to account for 45% of global electricity generation by 2030.
Insurance
IFRC-DREF triggers insurance payout after disaster relief demands exceed threshold
The policy provides up to $16.92m in coverage.The International Federation of Red Cross and Red Crescent Societies' Disaster Response Emergency Fund (IFRC-DREF) has triggered its first-ever insurance payout after disaster relief demands exceeded its deductible threshold. 
Insurance