Banking News — AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) for Central Reinsurance Corporation (Central Re) of Taiwan. The outlook for both ratings remains stable.

The affirmation reflects Central Re’s very strong balance sheet strength, adequate operating performance, favourable business profile, and appropriate enterprise risk management.

According to AM Best, Central Re’s risk-adjusted capitalisation, measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level at year-end 2024. Benefiting from retained operating profits, the company’s adjusted capital and surplus rose 8.9% to TWD 22.7 billion. Its investment portfolio remains prudent, with a majority allocated to diversified, liquid, investment-grade bonds and cash equivalents. AM Best expects the company’s BCAR to remain solid over the short to intermediate term.

In 2024, Central Re’s net profit increased to TWD 2.5 billion, with a five-year (2020–2024) return on equity of 8.0%. The domestic non-life segment saw a moderate decline, mainly due to reduced voluntary motor business, while underwriting margins narrowed following higher claims from major catastrophe events. Overseas business volume also contracted as the company restructured its portfolio to improve quality. However, the domestic life business continued to generate steady earnings, supporting overall underwriting results. Stable income from fixed-income assets and dividends bolstered investment performance, though currency fluctuations have introduced volatility in recent years.

As Taiwan’s sole domestic reinsurer with a long operating history, Central Re maintains strong relationships with local cedants. Although its domestic market share has modestly declined in recent years due to a focus on personal lines amid faster commercial line growth, AM Best expects its leadership in both life and non-life reinsurance to remain secure in the medium term. Overseas operations accounted for about one-fifth of total gross premiums in 2024, and the company is expected to continue a prudent underwriting strategy aimed at sustainable profitability and enhanced geographic and client diversification.

Negative rating actions could follow a significant deterioration in risk-adjusted capitalisation from major underwriting or investment losses, or a sustained weakening in the company’s domestic market position. Positive rating actions could occur if both domestic and overseas portfolios deliver sustained, favourable results that enhance overall operating performance while supporting the current business profile.