Insurers in Taiwan to issue bonds for capital adequacy

Regulatory risk-based capital ratios remained well above the 200% minimum.

Fitch Ratings has assessed the company profiles of Cathay Life and Fubon Life as 'Most Favourable' compared to other life insurers in Taiwan. 

Thanks to their strong market presence, large operating scales, and well-diversified product lines and distribution channels. Other insurers in the peer review were ranked as 'Favourable'.

All members of the peer group received Fitch Prism Model scores ranging from ‘Adequate’ to 'Strong'. Some insurers have reclassified assets to amortised costs to reduce capitalisation volatility from interest-rate movements. 

Their regulatory risk-based capital ratios remained well above the 200% minimum requirement. 

The localised Insurance Capital Standard (TW-ICS), set to roll out in 2026 alongside IFRS 17, includes a 15-year phase-in period by the Financial Supervisory Commission (FSC) to help insurers adjust their asset allocations and close potential capital gaps.

Fitch expects life insurers to continue issuing bonds, both onshore and offshore, to enhance their regulatory capital adequacy under TW-ICS. 

Insurers are anticipated to benefit from the FSC's expanded funding options, allowing them to issue capital-qualified subordinated bonds through overseas SPVs.