AM Best Affirms Credit Ratings of Cathay Century Insurance Company Limited

Business Wire

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

The ratings reflect Cathay Century’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.

Cathay Century posted another year of double-digit growth in consolidated adjusted capital and surplus (C&S) to TWD 20.3 billion at year-end 2025, buoyed by the partial retention of net profit derived from underwriting and investment results. The double-digit growth momentum continued into the first half of 2026. AM Best expects the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at the strongest level over the short to intermediate term, supported by organic growth in retained earnings from controlled expansion in underwriting and investment risks Other supportive factors in the balance sheet strength assessment include the company’s diversified investment portfolio, which focuses on low-risk fixed-income securities, good liquidity, healthy solvency ratio, comprehensive reinsurance arrangements and the strong financial flexibility afforded by the ultimate parent, Cathay Financial Holding Co., Ltd. (Cathay Financial Holding).

Cathay Century reported a net profit of TWD 3.8 billion in 2025, with return on equity of 18.9%, based on adjusted C&S. The company remained profitable in the first half of 2026. Gross premium written grew by a single-digit rate in 2025, mainly supported by the company’s expansion into the engineering and motor business, while its overall combined ratio improved moderately, due to better loss experience and continuous control on management expense, which benefits from the sizeable underwriting book and better economies of scale. In particular, Cathay Century’s major business line of voluntary motor has delivered a sustained underwriting margin, owing to its consistent risk-selective underwriting practices, gradual expansion of profitable policy coverage, as well as cumulative rate adjustments over the past few years.

Cathay Century remains the second-largest insurer in Taiwan’s non-life sector, with a market share of 13.8%, based on direct premiums written (DPW) in 2025. The company’s underwriting portfolio is diversified moderately with motor being a major line of business, accounting for half of the company’s DPW, followed by fire, engineering as well as accident and health businesses. The portfolio is skewed toward personal lines insurance products. Cathay Century continues to leverage the comprehensive business network of Cathay Financial Holding’s group and affiliated distribution channels to expand its underwriting portfolio. The company also has enhanced its risk management through regular reviews of product design and underwriting controls, while leveraging oversight and resources from its parent.

Negative rating actions could occur if there is a substantial deterioration in Cathay Century’s balance sheet strength assessment, and without timely capital support from Cathay Financial Holding. Positive rating actions could occur under the premise of an enhancement in the credit fundamentals of Cathay Financial Holding, and concurrently, if Cathay Century achieves sustained improvement and stability in its operating performance, while maintaining its current balance sheet strength assessment level. A deterioration in the parent’s credit profile, or a diminished level of parental support also may pose a negative impact on Cathay Century’s ratings.

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 www.ambest.com.