Improvement in underwriting bolsters Taiwan Life's outlook

Earnings may remain volatile due to the high proportion of interest-sensitive products. 

Taiwan Life’s underwriting profitability is expected to remain ‘stable’ this year, after its rebound in 2023, said Fitch Ratings.

The insurer’s profitability improved last year, with a return on equity rising to 10% from -3% in 2022, and a three-year average of 7.5%. 

The cessation of losses from its equity investment in CTBC Insurance and stable underwriting performance contributed to this recovery. 

However, earnings may remain volatile due to the high proportion of interest-sensitive products. The shift towards regular-premium policies is expected to support sustainable growth.

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Taiwan Life's investment risk is considered moderately weak due to high exposure to equity-type investments. 

Risky assets decreased to 249% of shareholder equity by the end of 2023 from 284% in 2022, thanks to an improved equity base.

The insurer’s regulatory risk-based capital ratio improved to 305% in 2023 from 275% in 2022, bolstered by TW$13b in subordinated bonds issued in July 2023.