Its consolidated adjusted capital and surplus grew by 16% end-2023.
Taiwan-based Cathay Insurance’s risk-adjusted capitalisation, as measured by AM Best’s Capital Adequacy Ratio (BCAR), remained strong at year-end 2023. Contributing factors include a diversified investment portfolio, focused on low-risk fixed-income securities, strong liquidity, and comprehensive reinsurance arrangements.
The company also benefits from financial flexibility through its parent, Cathay Financial Holding, AM Best said.
The company’s consolidated adjusted capital and surplus grew by 16%, reaching $0.49b (TW$15.7b) at the end of 2023. This growth was driven by retained net profit from underwriting and investments.
Despite a net loss of $0.61b (TW$19.6b) in 2022, primarily due to pandemic-related insurance claims, Cathay Century posted a net profit of $0.04b (TW$1.2b) in 2023.
However, profitability has yet to fully recover to pre-pandemic levels, with lingering claims from the first half of 2023.
The net loss ratio dropped to 66.6% in 2023, whilst the expense ratio stood at 36.4%, lower than the industry average. The company’s voluntary motor line has maintained a solid underwriting margin through selective risk-taking and rate adjustments.
Cathay Century holds a 13.3% market share in Taiwan’s non-life insurance sector, ranking as the second-largest insurer. Its portfolio is moderately diversified, with motor insurance making up over half of its direct premiums written (DPW) in 2023.
The rest is composed of fire, accident, and health insurance, with a focus on personal lines. Cathay Century continues to expand its underwriting portfolio through its parent group’s network and affiliated distribution channels.
Following pandemic-related challenges, the company has improved risk management practices, including product design reviews and enhanced underwriting controls, with oversight from Cathay Financial Holding.
($1.00 = TW$32.17)
