FWD maintains stable VNB margin at 60.2%

Its value of new business (VNB) grew by 21.9% in 2023.

FWD Group Holding’s financial leverage is projected to ease at ~25% on a pro forma basis after the completion of its refinancing activities in 2024, according to Fitch Ratings.

The group's value of new business (VNB) grew by 21.9% in 2023 to $991m, with a stable VNB margin of 60.2%. 

“We rank FWDGHL's company profile as 'Favourable', based on a 'Favourable' business profile and 'Neutral' corporate governance compared with that of other life insurers in Hong Kong,” Fitch Ratings said.

“The company has diversified premium sources, with a business presence in 10 markets across the region. It acquired additional stakes in FWD Takaful Berhad and PT Asuransi BRI Life in 2024.” it added.

In 2023, whilst FWD increased its investments in equity and equity-related funds, a significant portion of these funds were allocated to insurance funds with participating features. 

This structure implies that in the event of a major capital market disruption, the group could potentially lower policyholder dividend rates due to the shared risk nature of participating-type policies. 

However, the group maintains a low exposure to below-investment grade investments compared to its equity capital.