Well Link Life Insurance's investment yield aims for double digits

AM Best expects the company’s medium-term balance sheet to remain strong.

Well Link Life Insurance’s risk-adjusted capitalisation is projected to stay at the strongest level through 2025, according to AM Best, but downward pressure may emerge from 2026 due to capital requirements for anticipated growth.

AM Best also expects the company’s balance sheet strength to remain strong over the medium term, supported by robust regulatory solvency and controlled asset risk.  

The company’s investment portfolio, primarily composed of publicly listed bonds and stocks, is expected to maintain its diversification strategy, whilst liquidity remains stable.  

Despite reporting a -13.8% return-on-equity ratio in 2023, Well Link Life aims to improve underwriting profitability in 2024. 

Losses from onerous insurance contracts under the HKFRS17 standard weighed on its results, but the company anticipates higher operating expense efficiency over the intermediate term. 

Investment performance improved significantly in 2023, driven by capital gains and higher income, and the company expects this momentum to continue in 2024, targeting a double-digit investment yield.  

Market presence remains limited, with Well Link Life holding a 1.6% share of Hong Kong’s individual life new business market as of the first three quarters of 2024, ranking 12th amongst local insurers. 

The company plans to expand its long-term participating business whilst moderately growing its non-participating lines.  

AM Best views Well Link Life’s enterprise risk management as appropriate for its risk profile, with the company maintaining regulatory compliance through its annual Own Risk and Solvency Assessment.