Union Insurance settles pandemic claims, boosts capital

Its adjusted capital and surplus have returned to pre-COVID levels.

Taiwan-headquartered Union Insurance Co. carries a “strong and adequate” operating performance, neutral business profile and appropriate enterprise risk management, AM Best said.

Union’s balance sheet strength is supported by its risk-adjusted capitalisation, which remained at the strongest level in 2023 according to Best’s Capital Adequacy Ratio (BCAR). 

The company’s adjusted capital and surplus have largely recovered to pre-COVID-19 pandemic levels, driven by improved operating performance with full profit retention and reserve releases related to pandemic insurance policies. 

Union settled its pandemic insurance losses in the first half of 2023, allowing its capital position to grow through organic capital generation and profit retentions.

The company’s investment portfolio remains liquid and diversified, with a majority of assets invested in cash and domestic investment-grade bonds. 

Union’s reinsurance program is placed with a panel of reinsurers of good credit quality, which has remained stable despite industry-wide reinsurance rate hikes. The company’s risk-based capital ratio is healthy.

In 2023, Union reported significantly improved operating results, driven by a recovery in underwriting profitability to pre-pandemic levels and the release of reserve provisions for pandemic insurance claims. Gross premiums written increased moderately, supported by growth in commercial lines and non-motor personal lines. 

AM Best attributes the improved operating performance in part to a one-off reserve provisions release and expects Union to continue delivering positive results through traditional underwriting and investment income in the intermediate term.