HONG KONG, April 28, 2023–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Shinkong Insurance Company Limited (Shinkong Insurance) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Shinkong Insurance’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Shinkong Insurance’s risk-adjusted capitalization remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital and surplus level dropped slightly due to unfavourable losses reported under other comprehensive income and a dividend payout during 2022. The company’s risk-based capital ratio remains at a healthy level and above the regulatory requirement with a good level of buffer. Shinkong Insurance’s investment portfolio has been liquid and stable with the majority of its investment assets held in cash and investment grade bonds. The company’s reinsurance dependency remains moderate and is placed with reinsurer panels of good credit quality. The company has incurred limited claims losses on its pandemic-related insurance policies, despite the pandemic being a capital event for Taiwan’s non-life industry.

Shinkong Insurance continued to deliver positive underwriting results in 2022, supported by moderate top-line growth and stable operating expenses. The company’s net combined ratio remained stable in 2022, supported by favourable voluntary motor business and limited impact from large losses. The company recorded losses for its equity investments due to fluctuations in the capital markets. The company is expected to continue to invest in fixed-income products and long-term equity investments with stable investment income.

Shinkong Insurance is the third-largest insurer in Taiwan’s non-life insurance market based on gross premium written. The company’s underwriting portfolio has been moderately diversified with