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AM Best Revises Issuer Credit Rating Outlook to Positive for Shinkong Insurance Company Limited

AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Shinkong Insurance Company Limited (Shinkong Insurance) (Taiwan). The outlook of the FSR is stable.

The Credit Ratings (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).

The positive Long-Term ICR outlook reflects Shinkong Insurance’s consistently profitable operating performance amid a challenging operating environment over the past few years, partially attributed to the COVID-19 pandemic and capital market volatility. The company has benefitted from its prudent underwriting strategy, favourable claims experience and disciplined expense management. Pandemic-related insurance losses were limited. Shinkong Insurance also reported improved investment results in 2023 as interest and dividend income remained stable, while capital losses also shrank materially during the year. Overall, the company’s underwriting profitability and return on equity have consistently outperformed the industry average over the past five years.

Shinkong Insurance’s risk-adjusted capitalisation remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital and surplus recorded double-digit growth in 2023, mainly driven by positive operating results, despite being partially offset by a dividend payment. Shinkong Insurance’s investment portfolio has been liquid and stable with the majority of these 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’s risk-based capital ratio remains at a healthy level.

Shinkong Insurance is the third-largest insurer in Taiwan’s non-life insurance market based on gross premiums written. The company’s underwriting portfolio has been moderately diversified with a majority of its business in motor. The company’s distribution channel mix remains stable with its direct channel continuing to be the largest contributor. As for its pandemic-related insurance product, Shinkong Insurance has demonstrated prudent ERM practices on product development and a high level of control in product distribution.

Positive rating actions could occur if Shinkong Insurance maintains its competitive strength and better operating profitability against its peers, while maintaining a very strong balance sheet strength assessment. Negative rating actions could occur if there is a substantial decline in the company’s risk-adjusted capitalisation.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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