Cathay Financial Holding Co., Ltd.

2882

TW0002882008

Life & Health Insurance

End-of-day quote Taiwan S.E. Other stock markets 2026-06-16			5-day change	1st Jan Change
109.50 ^TWD	+5.29%		+15.26%	+44.46%

Jun. 02	Cathay Financial Unit Names Vice Chairman	MT
May. 29	Cathay Financial Holding Co., Ltd. Reports Earnings Results for the First Quarter Ended March 31, 2026	CI

Cathay Financial : 2025Q4 Financial Results Cathay Century Financial Statement (Consolidated)

Published on 05/05/2026 at 10:15 am EDT

Publicnow

CATHAY FINANCIAL HOLDING CO., LTD.

+5.29%

Cathay Century Insurance Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2025 and 2024 and Independent Auditors' Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" for the year ended December 31, 2025 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard 10 "Consolidated Financial Statements". Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

CATHAY CENTURY INSURANCE CO., LTD.

March 10, 2026

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders Cathay Century Insurance Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Cathay Century Insurance Co., Ltd. (the "Company") and its subsidiaries (collectively referred to as the "Group"), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "consolidated financial statements").

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprise, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in the audit of the Group's consolidated financial statements for the year ended December 31, 2025 is described as follows:

Adequacy of Loss Reserves

Loss reserve is a significant liability to the Company, representing 37% of the Group's total assets as of December 31, 2025.

Loss reserves is provided for claims filed but not yet paid and claims not yet filed. The reserve for claims filed but not yet paid is assessed by the claim department based on the relevant information from each received claim. The reserve for claims not yet filed is comprised of the provision calculated by the actuary department according to the claim development methods (accident year basis) or past claim experiences that complied with actuarial principle, along with a reserve for the unallocated loss adjustment expenses; such accrual principle is also applied to ceded loss reserve under reinsurance contract assets. The claims not yet filed that were estimated by the abovementioned claim development methods or past experiences with the actuarial principles were calculated by considering the weighted results of the claim development and expected loss rates. The actuary department exercises its professional judgment in determining the appropriate models, assumptions and parameters. Therefore, we identified the adequacy of loss reserves as a key audit matter. For the accounting policies and relevant disclosure information, refer to Notes 4, 5 and 20.

By performing control testing, we obtained an understanding of the valuation of loss reserves and the design and implementation of relevant internal controls. Moreover, we also performed the following audit procedures:

We obtained the actuarial report prepared by the contracted actuary and determined that the loss reserves were properly accrued, evaluated the contracted actuary's professional competence and capability were compliant with the regulations issued by the Financial Supervisory Commission of the Republic of China.
Our internal actuarial specialists evaluated the accuracy and completeness of the relevant data, as well as the reasonableness of the reserve for claims not yet filed by the actuarial method.

Other Matter

We have also audited the parent company only financial statements of Cathay Century Insurance Co., Ltd. as of and for the years ended December 31, 2025 and 2024 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee or supervisors, are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2025, and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors' report are Shiuh-Ran, Cheng and Shu-Wan Lin.

Deloitte & Touche Taipei, Taiwan Republic of China

March 10, 2026

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and consolidated financial statements shall prevail.

CATHAY CENTURY INSURANCE CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars) 2025 2024

ASSETS	Amount	%	Amount	%
CASH AND CASH EQUIVALENTS (Notes 4, 6 and 27)	$ 15,285,098	19	$ 11,174,184	17
RECEIVABLES (Notes 4, 11, 27 and 34)	3,433,902	4	3,338,812	5
INVESTMENTS Financial assets at fair value through profit or loss (Notes 4, 7 and 27)	14,680,235	19	14,496,026	22
Financial assets at fair value through other comprehensive income (Notes 4 and 8)	653,324	1	654,599	1
Financial assets at amortized cost (Notes 4 and 9)	11,350,480	14	10,039,725	15
Investments accounted for using the equity method, net (Notes 4 and 14)	2,553,784	3	2,406,891	4
Loans (Notes 4, 10 and 27)	68,788	-	96,451	-
REINSURANCE CONTRACT ASSETS (Notes 4, 12, 20 and 34)	26,001,932	33	17,312,724	27
PROPERTY AND EQUIPMENT (Notes 4 and 15)	315,734	-	463,754	1
RIGHT-OF-USE ASSETS (Notes 4, 16 and 27)	299,613	-	197,399	-
INTANGIBLE ASSETS (Notes 4 and 17)	122,111	-	104,478	-
DEFERRED TAX ASSETS (Notes 4 and 24)	4,558,554	6	4,585,963	7
OTHER ASSETS (Notes 18, 27 and 29)	559,980	1	632,440	1
TOTAL	$ 79,883,535	100	$ 65,503,446	100
LIABILITIES AND EQUITY
PAYABLES (Notes 4, 19, 27 and 34)	$ 5,100,128	7	$ 4,395,390	7
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (Notes 4, 7 and 27)	213,942	-	224,161	-
LEASE LIABILITIES (Notes 4, 16 and 27)	300,801	-	197,630	-
INSURANCE LIABILITIES (Notes 4, 5 and 20)	52,059,315	65	40,284,468	61
OTHER LIABILITIES	1,520,231	2	1,659,061	3
PROVISIONS (Notes 4 and 21)	292,047	-	349,882	1
DEFERRED TAX LIABILITIES (Notes 4 and 24)	369,643	1	445,671	1
Total liabilities	59,856,107	75	47,556,263	73
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 4 and 22) Share capital Ordinary shares	2,000,000	3	2,000,000	3
Capital surplus	7,861,133	10	7,861,133	12
Retained earnings Legal reserve	776,426	1	249,102	-
Special reserve	6,025,832	7	5,326,764	8
Unappropriated earnings	3,057,471	4	1,984,109	3
Total retained earnings	9,859,729	12	7,559,975	11
Other equity	306,566	-	526,075	1
Total equity attributable to owners of the Company	20,027,428	25	17,947,183	27
Total equity	20,027,428	25	17,947,183	27
TOTAL	$ 79,883,535	100	$ 65,503,446	100

The accompanying notes are an integral part of the consolidated financial statements.

CATHAY CENTURY INSURANCE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2025 2024 Amount % Amount %

OPERATING REVENUES

Retained earned premium (Notes 4, 27 and 34)

Written premium	$ 40,155,717	130	$ 37,463,714	133
Reinsurance premium	1,066,167	3	1,095,283	4
Premium income	41,221,884	133	38,558,997	137
Less: Reinsurance expenses	12,683,533	41	12,142,012	43
Less: Net change in unearned premium reserves
(Notes 4, 20 and 34)	953,567	3	1,073,807	4
Total retained earned premium	27,584,784	89	25,343,178	90
Reinsurance commission income (Note 34)	1,237,445	4	1,230,029	5
Fee income	52,674	-	54,248	-
Net gain on investments
Interest income (Notes 23 and 27)	952,606	3	858,863	3
Gain on financial assets and liabilities at fair value
through profit or loss (Notes 4 and 7)	948,254	3	678,426	2
Net gain on derecognition of financial assets at
amortized cost (Notes 4 and 9)	5,073	-	220	-
Share of profit (loss) of associates and joint
ventures accounted for using equity method
(Notes 4 and 14)	147,226	1	(126,818)	-
Foreign exchange (loss) gain - investment
(Notes 4 and 31)	(234,252)	(1)	447,559	2
Expected credit impairment (loss) gain on
investments (Note 4)	(830)	-	268	-
Gain (loss) on reclassification using overlay
approach (Notes 4 and 7)	200,304	1	(451,384)	(2)
Total net gain on investments	2,018,381	7	1,407,134	5
Other operating income	-	-	66,796	-
Total operating revenues	30,893,284	100	28,101,385	100

OPERATING COSTS

Retained claims payments (Notes 4, 27 and 34)

Insurance claims payments	18,258,015	59	16,764,222	60
Less: Claims and payments recovered from reinsurers	6,221,034	20	4,230,258	15
Total retained claims payments	12,036,981	39	12,533,964	45
Net changes in other insurance liabilities (Notes 4
and 20)	2,933,083	9	1,353,758	5
Commission expenses (Notes 4, 23, 27 and 34)	4,795,849	16	4,651,993	16
Other operating costs	211,140	1	36,796	-
Total operating costs	19,977,053	65	18,576,511	66
GROSS PROFIT	10,916,231	35	9,524,874	34

(Continued)

2025			2024
	Amount	%	Amount	%
OPERATING EXPENSES (Notes 23 and 27) General expenses	$ 5,338,161	17	$ 5,106,598	18
Administrative expenses	1,136,227	4	1,110,120	4
Employee training expenses	19,757	-	19,290	-
Expected credit impairment loss of non-investments	14,225	-	117,308	-
Total operating expenses	6,508,370	21	6,353,316	22
OPERATING INCOME	4,407,861	14	3,171,558	12
NON-OPERATING INCOME AND EXPENSES (Note 27)	8,125	-	23,184	-
PROFIT BEFORE INCOME TAX	4,415,986	14	3,194,742	12
INCOME TAX EXPENSE (Notes 4 and 24)	(661,108)	(2)	(558,120)	(2)
NET PROFIT	3,754,878	12	2,636,622	10
OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 22 and 24) Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans 3,290 Share of the other comprehensive income of		-	(25,600)	-
associates accounted for using the equity method 1,390		-	-	-
reclassified subsequently to profit or loss (658)		-	5,120	-
4,022		-	(20,480)	-
Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations	(42,224)	-	96,765	-
Share of the other comprehensive (loss) income of associates accounted for using the equity method	(10,983)	-	128,992	-
Unrealized gain (loss) on investments in debt instruments at fair value through other comprehensive income	6,153	-	(16,972)	-

Income tax related to items that will not be

(Continued)

	2025 Amount %		2024 Amount %
Other comprehensive (loss) income reclassified under the overlay approach	$ (200,304) (1)		$ 451,384 2
Income tax relating to items that may be reclassified subsequently to profit or loss	26,195	-	(21,653)	-
	(221,163)	(1)	638,516	2
Other comprehensive (loss) income, net of income tax	(217,141)	(1)	618,036	2
TOTAL COMPREHENSIVE INCOME	$ 3,537,737	11	$ 3,254,658	12
NET PROFIT ATTRIBUTABLE TO: Owner of the Company	$ 3,754,878	12	$ 2,636,622	9
Non-controlling interests	-	-	-	-
	$ 3,754,878	12	$ 2,636,622	9
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owner of the Company	$ 3,537,737	11	$ 3,254,658	12
Non-controlling interests	-	-	-	-
	$ 3,537,737	11	$ 3,254,658	12
EARNINGS PER SHARE (Note 25) Basic	$ 18.77		$ 13.18

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

CATHAY CENTURY INSURANCE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars)

Other Equity
						Exchange Differences on	Unrealized Gain (Loss) on		Other
			Retained Earnings			Translating the Financial Statements of	Financial Assets at Fair Value through Other	Remeasurement	Comprehensive Income (Loss) Reclassified
Shares			Unappropriated			Foreign	Comprehensive	of Defined	Under Overlay
(In Thousands)	Share Capital	Capital Surplus	Legal Reserve Special Reserve Earnings			Operations	Income	Benefit Plans	Approach Total Equity
200,000	$ 2,000,000	$ 7,861,133	$ - $ 4,674,882 $ 538,325			$ (329,230)	$ (79,179)	$ (154,495)	$ 470,943 $ 14,982,379
-	-	-	249,102	-	(249,102)	-	-	-	-	-
-	-	-	-	-	(289,854)	-	-	-	-	(289,854)
-	-	-	-	(631)	631	-	-	-	-	-
-	-	-	-	634,193	(634,193)	-	-	-	-	-
-	-	-	-	18,320	(18,320)	-	-	-	-	-
-	-	-	-	-	2,636,622	-	-	-	-	2,636,622
-	-	-	-	-	-	96,765	112,020	(20,480)	429,731	618,036
-	-	-	-	-	2,636,622	96,765	112,020	(20,480)	429,731	3,254,658
200,000	2,000,000	7,861,133	249,102	5,326,764	1,984,109	(232,465)	32,841	(174,975)	900,674	17,947,183
-	-	-	527,324	-	(527,324)	-	-	-	-	-
-	-	-	-	-	(1,457,492)	-	-	-	-	(1,457,492)
-	-	-	-	(707)	707	-	-	-	-	-
-	-	-	-	678,667	(678,667)	-	-	-	-	-
-	-	-	-	21,108	(21,108)	-	-	-	-	-
-	-	-	-	-	2,368	-	(2,368)	-	-	-
-	-	-	-	-	3,754,878	-	-	-	-	3,754,878
-	-	-	-	-	-	(42,224)	(3,440)	2,632	(174,109)	(217,141)
-	-	-	-	-	3,754,878	(42,224)	(3,440)	2,632	(174,109)	3,537,737
200,000	$ 2,000,000	$ 7,861,133	$ 776,426	$ 6,025,832	$ 3,057,471	$ (274,689)	$ 27,033	$ (172,343)	$ 726,565	$ 20,027,428

Equity Attributable to Owners of the Company

BALANCE ON JANUARY 1, 2024

Appropriation of 2023 earnings Legal reserve

Cash dividends distributed by the Company Special reserve

The newly recognized of special reserve for catastrophic event and the special reserve for fluctuation of risk

Appropriation of special reserve for personal insures travel insurance Net profit for the year ended December 31, 2024

Other comprehensive income (loss) for the year ended December 31, 2024, net of income tax

Total comprehensive income (loss) for the year ended December 31, 2024

BALANCE ON DECEMBER 31, 2024

Appropriation of 2024 earnings Legal reserve

Cash dividends distributed by the Company Special reserve

The newly recognized of special reserve for catastrophic event and the special reserve for fluctuation of risk

Appropriation of special reserve for personal insures travel insurance Change from associates accounted for using the equity method

Net profit for the year ended December 31, 2025

Other comprehensive income (loss) for the year ended December 31, 2025, net of income tax

Total comprehensive income (loss) for the year ended December 31, 2025

BALANCE ON DECEMBER 31, 2025

The accompanying notes are an integral part of the consolidated financial statements.

CATHAY CENTURY INSURANCE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)
	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax	$ 4,415,986	$ 3,194,742
Adjustments for: Depreciation expense	341,195	318,112
Amortization expense	61,023	67,185
Net gain on financial assets and liabilities at fair value through profit or loss	(948,254)	(678,426)
Interest expense	5,220	5,735
Net gain on derecognition of financial assets measured at amortized cost	(5,073)	(220)
Interest income	(952,606)	(858,863)
Net changes in insurance liabilities	11,774,847	6,570,544
Expected credit impairment loss (gain) on investments	830	(268)
Expected credit impairment loss on non-investment	14,225	117,308
Share of (profit) loss of associates accounted for using the equity method	(147,226)	126,818
(Gain) loss on reclassification using the overlay approach	(200,304)	451,384
Loss on disposal of property and equipment	23	148
Gain on lease modification	(22)	(10)
Others	-	98
Changes in operating assets and liabilities Decrease (increase) in notes receivable	11,095	(10,629)
Increase in premiums receivable	(20,126)	(128,243)
Increase in other receivables	(79,221)	(104,700)
Decrease (increase) in financial instruments at fair value through profit or loss	497,004	(3,078,089)
Decrease in financial assets at fair value through other
comprehensive income	7,423	7,301
Increase in financial assets at amortized cost	(1,306,505)	(573,438)
Increase in reinsurance contract assets	(8,689,208)	(3,833,474)
Decrease in other assets	72,458	22,651
Decrease in claims outstanding	-	(2,238)
Increase in commissions payable and fees	22,363	73,243
Increase (decrease) in due to reinsurers and ceding companies	478,134	(421,734)
Increase in other payables	34,410	323,797
Decrease in provisions	(54,545)	(103,290)
(Decrease) increase in other liabilities	(138,830)	102,457
Cash generated from operations	5,194,316	1,587,901
Interest received	938,720	821,498
Dividends received	249,645	217,105
Interest paid	(5,220)	(5,735)
Income tax paid	(513,716)	(211,686)

Net cash generated from operating activities 5,863,745 2,409,083 (Continued)

CATHAY CENTURY INSURANCE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)
	2025	2024
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment	$ (66,392)	$ (165,164)
Acquisition of intangible assets	(35,881)	(37,519)
Decrease in loans	27,663	26,626
Net cash used in investing activities	(74,610)	(176,057)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of the principal portion of lease liabilities	(170,299)	(161,292)
Cash dividends paid	(1,457,492)	(289,854)
Net cash used in financing activities	(1,627,791)	(451,146)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES	(50,430)	9,341
NET INCREASE IN CASH AND CASH EQUIVALENTS	4,110,914	1,791,221
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	11,174,184	9,382,963
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$ 15,285,098	$ 11,174,184

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

CATHAY CENTURY INSURANCE CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

GENERAL INFORMATION
Cathay Century Insurance Co., Ltd. (the "Company") was incorporated in Taiwan on July 19, 1993, under the Company Act of the Republic of China (R.O.C.). On April 22, 2002, the Company became a wholly-owned subsidiary of Cathay Financial Holdings Co., Ltd. ("Cathay Financial Holdings") through a share swap pursuant to the Financial Holdings Company Act. The Company was renamed from Tong-Tai Insurance Co., Ltd. to Cathay Century Insurance Co., Ltd., as approved by Letter No. 0910706108 issued by the Ministry of Finance on June 28, 2002 and officially announced on August 2, 2002. The Company mainly engages in the business of property and casualty insurance. The Company's registered office and the main business location are at No. 296, Sec. 4, Jen Ai Road, Taipei, Taiwan, R.O.C. Cathay Financial Holdings is the Company's parent company and ultimate parent company.
The consolidated financial statements are presented in the Company's functional currency, the New Taiwan dollar.
APPROVAL OF FINANCIAL STATEMENTS
The consolidated financial statements were approved by the Company's board of directors on March 10, 2026.
APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS
1. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the "IFRS Accounting Standards") endorsed and issued into effect by the Financial Supervisory Commission (FSC)
  Identification of related parties
  In accordance with the Q&A "Identification of Related Parties" issued by the Accounting Research and Development Foundation (ARDF in June 2025, the Group has reassessed its relationship with funds managed by the investment trust company to determine whether it exercises control or significant influence, or if it solely provides key management services to them. Since the fellow subsidiary only provides key management services to certain managed funds, the previous identification of related parties based on the Q&A issued by the ARDF in July 2013 was revised. Accordingly, these funds are no longer identified as related parties of the Group, effective from January 1, 2025. Furthermore, in accordance with the Q&A issued by the FSC, comparative information for the year 2024 needs not to be restated, which means the identified and disclosed related party relationships and transactions in prior financial statements are not required to be adjusted retrospectively.
2. The IFRS Accounting Standards endorsed by the FSC for application starting from 2026
  New, Amended and Revised Standards and Interpretations
  Effective Date Announced by International Accounting Standards Board
  (IASB)
  Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments"
  Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity"
  January 1, 2026
  January 1, 2026
  Annual Improvements to IFRS Accounting Standards - Volume 11 January 1, 2026
  IFRS 17 "Insurance Contracts" (including the 2020 and 2021 amendments to IFRS 17)
  January 1, 2023
  1. Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments"
    1. The amendments to the application guidance of classification of financial assets
      The amendments mainly amend the requirements for the classification of financial assets, including:
      1. If a financial asset contains a contingent feature that could change the timing or amount of contractual cash flows and the contingent event itself does not relate directly to changes in basic lending risks and costs (e.g., whether the debtor achieves a contractually specified reduction in carbon emissions), the financial asset has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding if, and only if,
        In all possible scenarios (before and after the occurrence of a contingent event), the contractual cash flows are solely payments of principal and interest on the principal amount outstanding; and
        In all possible scenarios, the contractual cash flows would not be significantly different from the contractual cash flows on a financial instrument with identical contractual terms, but without such a contingent feature.
      2. To clarify that a financial asset has non-recourse features if an entity's ultimate right to receive cash flows is contractually limited to the cash flows generated by specified assets.
      3. To clarify that the characteristics of contractually linked instruments include a prioritization of payments to the holders of financial assets using multiple contractually linked instruments (tranches) established through a waterfall payment structure, resulting in concentrations of credit risk and a disproportionate allocation of cash shortfalls from the underlying pool between the tranches.
    2. The amendments to the application guidance of derecognition of financial liabilities
      The amendments mainly stipulate that a financial liability is derecognized on the settlement date. However, when settling a financial liability in cash using an electronic payment system, the Group can choose to derecognize the financial liability before the settlement date if, and only if, the Group has initiated a payment instruction that resulted in:
      - The Group having no practical ability to withdraw, stop or cancel the payment instruction;
      - The Group having no practical ability to access the cash to be used for settlement as a result of the payment instruction; and
      - The settlement risk associated with the electronic payment system being insignificant.
      An entity shall apply the amendments retrospectively but is not required to restate prior periods. The effect of initially applying the amendments shall be recognized as an adjustment to the opening balance at the date of initial application. An entity may restate prior periods if, and only if, it is possible to do so without the use of hindsight.
  2. IFRS 17 "Insurance Contracts"(including the 2020 and 2021 amendments to IFRS 17)
    Under the current financial reporting framework, insurance contracts and financial instruments with or without discretionary participation features are accounted for in accordance with the requirements of IFRS 4 and the Regulations Governing the Setting Aside of Various Reserves by Insurance Enterprises. The related policy reserves are determined and certified by qualified actuaries approved by the FSC. Please refer to Note 4, summary of material accounting policy information.
    In accordance with the regulations of the FSC, the date of initial application of IFRS 17 is January 1, 2026. IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and will replace IFRS 4. IFRS 17 applies to insurance contracts issued by an entity (including reinsurance contracts), reinsurance contracts held, and investment contracts with discretionary participation features issued by an entity, provided that the entity also issues insurance contracts. IFRS 17 introduces a consistent measurement model for insurance liabilities. The standard provides three measurement approaches: The General Measurement Model, the Variable Fee Approach, and the Premium Allocation Approach. The Variable Fee Approach applies to insurance contracts with direct participation features. In addition, when certain eligibility criteria are met, an entity may elect to apply the Premium Allocation Approach as a simplified method for measuring groups of insurance contracts.
    The General Measurement Model estimates the amount, timing, and uncertainty of the future cash flows of a group of insurance contracts based on current assumptions, and includes a risk adjustment for non-financial risk to reflect the compensation required for bearing the uncertainty. The model considers the market interest rates and the effects of options and guarantees embedded in insurance contracts on the related cash flows. The model also determines the contractual service margin ("CSM"), which represents the unearned profit that the entity recognizes as it provides services under the insurance contracts.
    The Group applies the transition requirements of IFRS 17 in the preparation of its financial statements. As a general principle, the Group applies the full retrospective approach. Where the application of the full retrospective approach is impracticable, the Group applies either the modified retrospective approach or the fair value approach, as appropriate.
    When applying the full retrospective approach, the Group identifies, recognizes, and measures each group of insurance contracts as of January 1, 2025 as if IFRS 17 had always been applied. When applying the modified retrospective approach, the Group uses reasonable and supportable information to achieve results that are as close as possible to those obtained under the full retrospective approach. When applying the fair value approach, the Group also uses reasonable and supportable information, and determines the contractual service margin or loss component of the liability for remaining coverage as of January 1, 2025 based on the difference between the fair value of the group of insurance contracts at that date and the fulfillment cash flows measured as of the same date.
    Prior to the application of IFRS 17, in order to mitigate the potential impacts and inconsistencies arising from the earlier effective date of IFRS 9 relative to IFRS 17, the Group elected to apply the overlay approach to the designated financial assets in accordance with IFRS 4. Upon the application of IFRS 17, the Group will discontinue the application of the overlay approach.
    Redesignation of financial assets
    At the date of initial application of IFRS 17, an entity that has already applied IFRS 9 may redesignate financial assets that meet the requirements of paragraph C29 of IFRS 17. In addition, for financial assets that were derecognized during the comparative period prior to the date of initial application of IFRS 17, an entity may elect to apply the classification overlay approach on an instrument-by-instrument basis as if those financial assets had been redesignated in accordance with paragraph C29 of IFRS 17 during the comparative period.
    The Group expects to assess the redesignation of relevant financial assets based on the financial assets held as of January 1, 2026 and the facts and circumstances existing on that date.
    The Group has elected not to restate the comparative information for the year ended December 31, 2025 in relation to the redesignation of financial assets. Any difference between the previous carrying amounts of those financial assets and their carrying amounts at the date of initial application will be recognized in opening retained earnings (or other appropriate components of equity) at the date of initial application. The Group will disclose the classification changes under IFRS 9 and the related reconciliation information in the financial statements for the year ended December 31, 2026.
    As of the date of issuance of the financial statements, the Group has completed its preliminary assessment of the impact of IFRS 17 on its financial position and financial performance for the year ended December 31, 2025 as of the date of initial application (i.e., January 1, 2026). Reflecting changes in market interest rates and the resulting impact on insurance contract liabilities, as well as the redesignation of financial assets to support investment stability and asset-liability management objectives, the Group expects that, as of the initial application date, equity would increase by approximately $1,596,233 thousand.
    As of the date the consolidated financial statements were authorized for issue, the Group has assessed that the application of other standards and interpretations will not have a material impact on the Group's financial position and financial performance.
3. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC
  New, Amended and Revised Standards and Interpretations
  Effective Date
  Announced by IASB (Note 1)
  Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture"
  To be determined by IASB
  IFRS 18 "Presentation and Disclosure in Financial Statements" January 1, 2027 (Note 2)
  IFRS 19 "Subsidiaries without Public Accountability: Disclosures" (including the 2025 amendments to IFRS 19)
  Amendments to IAS 21 "Translation to a Hyperinflationary Presentation Currency"
  January 1, 2027
  January 1, 2027
  Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.
  Note 2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.
  IFRS 18 "Presentation and Disclosure in Financial Statements" and consequential amendments
  IFRS 18 will supersede IAS 1 "Presentation of Financial Statements". The main changes comprise:
  - To classify items of income and expenses presented in the statement of profit or loss into the operating, investing, financing, income taxes and discontinued operations categories, the Group shall assess whether it has specified main business activities of investing in particular types of assets and providing financing to customers.
  - The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.
  - Provides guidance to enhance the requirements of aggregation and disaggregation: The Group shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Group shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Group labels items as "other" only if it cannot find a more informative label.
  - Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management's view of an aspect of the financial performance of the Group as a whole, the Group shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interests effects of related reconciliation items.
    In addition, the following consequential amendments have been made to IAS 7 "Statement of Cash Flows":
  - The Group shall use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method.
  - Interest and dividends received by the Group shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. However, if, after assessment, the Group has a specific main operating activity, it shall determine how to classify dividends received, interest received and interest paid in the statement of cash flows by referring to how it classifies dividend income, interest income and interest expense in the statement of profit or loss. The total of each of these cash flows shall be classified in a single category in the statement of cash flows.
  Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the other impacts of the above amended standards and interpretations on the Group's financial position and financial performance and will disclose the relevant impact when the assessment is completed.
SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
1. Statement of compliance
  The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and IFRS Accounting Standards as endorsed and issued into effect by the FSC.
2. Basis of preparation
  The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.
  The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:
  1. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
  2. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
  3. Level 3 inputs are unobservable inputs for an asset or liability.
3. Classification of current and non-current assets and liabilities
  Assets and liabilities of the consolidated financial statements are classified by nature and are presented in the order of liquidity instead of being classified as current or noncurrent.
4. Basis of consolidation
  The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).
  Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.
  Adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those of the Group.
  All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.
  Refer to Note 13 and Table 5 for detailed information on subsidiaries (including percentages of ownership and main businesses).
5. Foreign currencies
  In preparing the financial statements of each individual entity, transactions in currencies other than the entity's functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
  At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.
  Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.
  Non-monetary item denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.
  For the purpose of presenting consolidated financial statements, the financial statements of the Company's foreign operations (including subsidiaries and associates in other countries) that are prepared using functional currencies which are different from the currency of the Company are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.
6. Investments in associates
  An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture.
  The Group uses the equity method to account for its investments in associates.
  Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group's share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group's share of the equity of associates.
  When the Company subscribes for additional new shares of an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group's proportionate interest in the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus -changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Group's ownership interest is reduced due to its additional subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.
  When the Group's share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group's net investment in the associate), the Group discontinues recognizing its share of further loss, if any. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.
  The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.
  The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment's fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an
  investment in a joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest.
  When the Group transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group's consolidated financial statements only to the extent of interests in the associate that are not related to the Group.
7. Property and equipment
  Property and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.
  The depreciation of property and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effects of any changes in estimates accounted for on a prospective basis.
  On derecognition of an item of property and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.
8. Intangible assets
  1. Intangible assets acquired separately
    Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.
  2. Derecognition of intangible assets
    On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.
9. Impairment of property and equipment, right-of-use assets and intangible assets
  At the end of each reporting period, the Group reviews the carrying amounts of its property and equipment, right-of-use assets and intangible assets to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are allocated to the individual cash-generating units; otherwise, they are allocated to the smallest group of cash-generating units.
  Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the assets may be impaired.
  The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.
  When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.
10. Financial instruments
  Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments.
  Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (FVTPL)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.
  1. Financial assets
    All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.
    1. Categories of financial assets, initial recognition and subsequent measurement
      Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in debt instruments at fair value through other comprehensive income (FVTOCI).
      1. Financial assets at FVTPL
        Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL, including investments in equity instruments that are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.
        Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset.
        Fair value is determined in the manner described in Note 26.
        In addition, to reduce the fluctuations in profit or loss as a result of IFRS 9 being applied earlier than IFRS 17, the Group elects to remove profit or loss arising from changes in fair value in subsequent measurement and present it in other comprehensive income based on the overlay approach under IFRS 4. Overlay approach is applied to financial assets if all of the following conditions are met:
        The financial assets are held in respect of activities related to IFRS 4.
        The financial assets are measured at FVTPL applying IFRS 9 but would not have been measured at FVTPL in its entirety applying under IAS 39.
        The financial assets designated to apply the overlay approach at initial recognition when an entity first applies IFRS 9 or when a new financial asset is initially recognized or when a financial asset newly meets the criteria having previously not met.
      2. Financial assets at amortized cost
        Financial assets that meet the following conditions are subsequently measured at amortized cost:
        The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
        The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
        Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents and receivables at amortized cost, equal the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.
        Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:
        Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and
        Financial asset that is not credit-impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.
        A financial asset is credit impaired when one or more of the following events have occurred:
        Significant financial difficulty of the issuer or the borrower;
        Breach of contract, such as a default;
        It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
        The disappearance of an active market for that financial asset because of financial difficulties.
        Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.
        Bank balances used by the Group that are subject to third-party contractual restrictions are included as part of cash unless the restrictions result in a bank balance that no longer meets the definition of cash.
      3. Investments in debt instruments at FVTOCI
        Debt instruments that meet both of the following conditions are subsequently measured at FVTOCI:
        The debt instrument is held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of such financial assets; and
        The contractual terms of the debt instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
        Investments in debt instruments at FVTOCI are subsequently measured at fair value. Changes in the carrying amounts of these debt instruments relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and impairment losses or reversals are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of.
    2. Impairment of financial assets
      The Group recognizes a loss allowance for expected credit losses (ECLs) on financial assets at amortized cost (including receivables) and investments in debt instruments that are measured at FVTOCI.
      The Group always recognizes lifetime ECLs for receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.
      ECLs reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
      For internal credit risk management purposes, the Group determines that the following situations indicate that a financial asset is in default without taking into account any collateral held by the Group:
      1. Internal or external information shows that the debtor is unlikely to pay its creditors.
      2. Financial asset is more than 90 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.
        The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.
        In addition, in accordance with the Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/Non-accrual Loans, credit assets are classified as normal assets ("First Category"), assets that require special attention ("Second Category"), assets that are substandard ("Third Category"), assets that are doubtful ("Fourth Category") and assets for which there is loss ("Fifth Category") based on the borrower's financial conditions and the delay for payment of principal and interests as well as the status of the loan collateral and the length of time overdue. The minimum amounts of allowance for bad debts are based upon each of the following categories:
        The sum of 0.5% of the First Category loan assets excluding life insurance policy loans, premium loans and loans to government agencies, 2% of the Second Category loan assets, 10% of the Third Category loan assets, as well as 50% and 100% of the Fourth and Fifth Category loan assets.
        1% of the sum of all five categories of loan assets, excluding life insurance loans, automatic premium loans and loans to government agencies.
        Total unsecured portion of non-performing loans and non-accrual loans.
        Besides, pursuant to Jin Guan Bao Tsai No. 10402506096, the Company shall keep the ratio of the allowance for bad debt over the loans at 1.5% or above to strengthen its ability against loss exposure to specific loan assets.
    3. Derecognition of financial assets
      The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
      On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss.
  2. Equity instruments
    Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
    Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.
    The repurchase of the Company's own equity instruments is recognized in and deducted directly from equity, and its carrying amounts are calculated based on weighted average by share types. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company's own equity instruments.
  3. Financial liabilities
    1. Subsequent measurement
      Except the following situations, all financial liabilities are measured at amortized cost using the effective interest method:
      Financial liabilities at FVTPL
      Financial liabilities are classified as at FVTPL when such financial liabilities are held for trading.
      Financial liabilities held for trading are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest or dividends paid on the financial liability. Fair value is determined in the manner described in Note 26.
    2. Derecognition of financial liabilities
      The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
  4. Derivative financial instruments
    The Group enters into a variety of derivative financial instruments to manage its exposure to foreign exchange rate risks, including foreign exchange forward contracts, interest rate swaps, foreign exchange swaps, cross-currency swap contract, options and futures.
    Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.
    Derivatives embedded in hybrid contracts that contain financial asset hosts that are within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the host contracts are not measured at FVTPL.
11. Reinsurance business
  In order to limit the possible losses caused by certain events, the Group arranges reinsurance business based on its business needs and related insurance regulations. For reinsurance of ceded business, the Group cannot refuse to fulfill its obligations to the insured when the reinsurer fails to fulfill its obligations.
  For the ceding reinsurance, reinsurance expenses are recognized based on the ceding reinsurance contract. According to matching principle, the reinsurance expenses should be recognized in the same accounting period as the insurance premiums. In addition, the Group accrues the reinsurance expense at the balance sheet date in a reasonable and systematic manner for the billing statements that have not yet been received as well as related income (for example, reinsurance commission income). The related profit or loss for reinsurance is not deferred.
  Reinsurance reserve assets present the rights to reinsurers and comprise of ceded unearned premium reserve, ceded loss reserve, and ceded premium deficiency reserve, which are recognized according to the Regulations Governing the Setting Aside of Various Reserves by Insurance Enterprises and other regulations as well as the conditions of reinsurance contracts.
12. Reserves for liabilities
  Insurance reserves provided for insurance contracts should be audited by the actuaries certified by the FSC and should also conform to the Regulations Governing the Setting Aside of Various Reserves by Insurance Enterprises, Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance, Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance and the Regulations for the Reserves for Nuclear Energy Insurance.
  The descriptions of these reserves are as follows:
  1. Unearned premium reserve
    For an in-force contract with a remaining policy period or an unterminated insured risk, the calculation and the provision of unearned premium reserve are based on the unexpired risk of each insurance.
    Unearned premium reserve for the compulsory insurance contract is provided in conformity with the Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance.
    Unearned premium reserve for the policy-oriented residential earthquake insurance contracts is provided in conformity with the Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance.
    Unearned premium reserve for nuclear energy insurance contracts is provided in conformity with the Regulations for the Reserves of Nuclear Energy Insurance.
    Except as otherwise provided by regulations, the manners of provisions for unearned premium reserve are decided by actuaries according to the characteristics of each insurance, which cannot be changed without permission by the authorities, and the year-end balance of unearned premium reserve should be audited by actuaries at the end of the year.
  2. Loss reserve
    Loss reserve is provided for losses filed but not yet paid and losses not yet filed by insurance type based on the past experiences of actual claims and expenses in line with the actuarial principles. The reserve for losses filed but not yet paid is assessed based on the actual relevant information of each case and provided by insurance type.
    Loss reserve for the compulsory insurance contracts is provided in conformity with the Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance.
    Loss reserve for policy-oriented residential earthquake insurance contracts is provided in conformity with the Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance.
    Loss reserve for Nuclear Energy Insurance contracts is provided in conformity with the Regulations for the Reserves for Nuclear Energy Insurance.
  3. Special reserve
    Special reserves are comprised of special reserves for catastrophic events, special reserves for fluctuation of risk and special reserves for other special purposes.
    In accordance with the Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance, the Group shall set aside the special reserves as liabilities which is calculated based on the sum of retained earned pure premiums, recovery of loss reserve and the interest accrued of the beginning balance of the special reserve, minus the retained claims and the provision of loss reserve; if the sum of retained earned pure premiums, recovery of loss reserve and the interest accrued of the beginning balance of the special reserve in the preceding fiscal year is less than the sum of the retained claims and the provision of loss reserve, the deficit shall be amended with the cumulative recovery of the special reserve in the previous years. If any deficit remains, the balance shall be recorded as a memorandum entry and amended with the recovery of the special reserves in the subsequent years.
    Furthermore, according to the Notice for the improvement of the reserves of natural disaster insurance (commercial-business earthquake, typhoon and flood insurance enterprises) issued by the Financial Supervisory Commission on November 9, 2012, except for those special reserves of compulsory automobile insurance, nuclear energy insurance, residential earthquake insurance, commercial-business earthquake insurance and typhoon and flood insurance, the special reserves recognized as liabilities before December 31, 2012 were used to compensate the deficiencies of commercial-business earthquake insurance and typhoon and flood insurance to the required level and recognized as liabilities. The remaining special reserves were reclassified as equity, net of tax according to IAS 12 starting from January 1, 2013. In addition, the above precautions were amended by Rule No. 11101405951 on June 30, 2022, and the name was changed to "Directions for Strengthening Disaster Reserve by Non-Life Insurance Enterprises". According to point eight of the Notices, when the actual retained claims that resulted from disasters exceeded the expected claims net of the reversal of the special reserve for a catastrophic event, or the reserves accumulate to the full water level, the Group should offset or recover the special reserves for hazard changes according to point three of the "Regulations Governing Various Reserves for Commercial Earthquake Insurance and Typhoon and Flood Insurance Operated by Non-Life Insurance Enterprises". The write off and recovery of special reserves for catastrophic events and fluctuation of risk that is provided under liabilities should be in conformity with the notice mentioned above.
    1. Special reserves for catastrophic event
      Special reserves for catastrophic events are provided at the rates for each insurance type required by the authorities.
      As a single event which meets the government's definition of a major accident, special reserves for catastrophic events can be reversed if the total retained claims for each insurance type of an individual company reach $30 million and the total claims for each insurance type of all non-life insurance companies reach $2,000 million.
      Special reserves for catastrophic events that have been provided for more than 15 years may be reversed in the recovery manner prescribed by the appointed actuary, which should be filed with the authorities. In addition, such reserves for commercial businesses earthquake insurance and typhoon and flood insurance may be reversed only if they have been provided for more than 30 years.
    2. Special reserves for fluctuation of risk
      For retained business of each insurance, when actual claims net of the debit amounts to special reserves for catastrophic events are lower than the expected claims, 15% of the difference should be provided as special reserves for fluctuation of risk. For commercial-business earthquake insurance and typhoon and flood insurance, the provision rate is 75% of the difference.
      For retained business of each insurance, when actual claims net of the debit amounts to special reserves for catastrophic events are higher than the expected claims, the difference may be debited to the existing special reserves for fluctuation of risk. If the special reserves for fluctuation of risk for an insurance type are insufficient to cover the difference, the shortfall may be debited to the special reserves for fluctuation of risk of other insurance types. The insurance type and debit amounts for covering the shortfall should be filed with the authorities.
      For each type of insurance, when the accumulated provisions of the special reserves for fluctuation of risk exceed 60% (30% for accident insurance and health insurance) of the retained earned premiums for the current year, the excess should be recovered. For commercial-business earthquake insurance and typhoon and flood insurance, if the accumulated provisions of special reserves for fluctuation of risk exceed 18 times and 8 times, respectively, of the retained earned premiums for the current year, the excess should be recovered as income.
  4. Premium deficiency reserve
    For unexpired in-force contracts or unterminated incurred risks of each insurance, if the estimated amounts of the future claims and expenses exceed the sum of the unearned premium reserves and the expected future premium income, the deficiency should be set aside as premium deficiency reserve.
  5. Policy reserve
    The minimum provision for policy reserve for health insurance with policy periods longer than one year is determined by the full preliminary term method. However, the method of provision for health insurance with a special nature is regulated by the authorities.
  6. Liability adequacy reserve
    When performing the liability adequacy test required by IFRS 4, the future cash flows are estimated based on current information on recognized liabilities as of each reporting date. If the test result shows inadequate liability reserve, the shortfall should be recognized as a liability adequacy reserve.
13. Classification of insurance products
  An insurance contract refers to a contract where the insurer accepts the insurance policyholder's transfer of significant insurance risk and agrees to compensate the policyholder for any damages caused by a particular uncertain future event (insured event). The Group's identification of a significant insurance risk refers to any insured event that occurs and causes the Group to incur additional significant payments.
  For a policy that meets the definition of an insurance contract in the initial phase, it is treated as an insurance contract before the right of ownership and obligations expired or extinguished, even if the exposure to insurance risk during the policy period has significantly decreased. However, if an insurance contract with features of financial instruments transfers a significant insurance risk to the Group subsequently, the Group should reclassify the contract as an insurance contract.
14. Revenue and acquisition costs of insurance business
  Direct premiums are recognized for all insurance policies underwritten and issued in current periods. Reinsurance premiums are usually recognized as the billing statements are delivered, and, on the balance sheet date, reinsurance premiums of which the billing statements are not yet received are accrued in a reasonable and systematic manner. Related acquisition costs are recognized in the same periods, including commission expenses, agency fees, service fees and reinsurance commission expenses.
  Taxes related to the insurance premium revenue are recognized pursuant to "Value-added and Non-value-added Business Tax Act" and "Stamp Tax Act" on an accrual basis.
15. Insurance claims and payments
  Claims and payments (including claim expenses) filed and paid pertaining to the direct insurance business are recognized as paid claims in current periods. For claims filed but not yet paid with determined amounts and those without determined amounts are recognized as net changes in loss reserve based on relevant information of each case by insurance type.
  For direct insurance and ceding reinsurance, claims not yet filed are estimated based on past experience according to actuarial principles and recognized as net changes in loss reserve.
  For claims to be recovered from the reinsurer under the reinsurance contract, claims and payments (including claim expenses) recoverable from reinsurers are recognized as claims recovered from reinsurers. For those of filed but not yet paid and not yet filed cases, claims and payments (including claim expenses) are recognized as net changes in loss reserve.
  Provision for loss reserve is undiscounted.
16. Liability adequacy test
  At the end of each reporting period, each type of insurance is subjected to the test by the expected cost method to assess the adequacy of insurance liabilities. The expected cost method requires the Group to estimate future cash flows of insurance contracts in accordance with the requirements for actuaries that was issued by the Actuarial Institute of the Republic of China. If an assessment shows that the carrying amount of insurance liabilities (less related intangible assets) is not enough to cover the estimated future cash flows, the entire shortfall is recognized in profit or loss.
  Liability adequacy test is calculated on the undiscounted basis.
17. Salvage and subrogation
  Salvage legally acquired from the claim procedure for direct written business should be recognized at its fair value. Subrogation legally acquired should be recognized when the actual recovery is definite (the inflow of the economic benefits in the future is more likely than not) and reliably measured.
18. Co-insurance organization, co-insurance and guarantee fund agreement
  The Company and all the members approved by the competent authority set the "Co-insurance Contract of Compulsory Automobile Liability Insurance" and agreed that the business should be fully included in the co-insurance, violators have to pay liquidated damages and agreed to be inspected by co-insurance team. The business is calculated on the basis of pure premiums and in accordance with the agreed portion. In addition to the liquidation or going out of business, the members shall not withdraw. If the members stop to operate the compulsory automobile liability insurance, it should drop out from the co-insurance organization at the same time, and the responsibility of unearned premiums applies natural expiry.
  The Company, the property insurance company with the order for traveling industry performance guarantee insurance and the reinsurance company set the "Co-insurance Contract of Traveling Industry Performance Guarantee Insurance" and agreed that the business should be fully included in the co-insurance, violators have to pay liquidated damages and agreed to be inspected by the co-insurance organization. The business is calculated on the basis of the co-insurance premium and in accordance with the agreed proportion. Members shall make notice in writing when going to withdraw from co-insurance three months before the start of the following year began three months ago. The original undertaken responsibility will cease to exist at the end of the year and the member company which drops out from the co-insurance organization will be held responsible for the unfinished part of the responsibility until its natural expiry.
19. Leases
  At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. The Group as lessee
  The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for by applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.
  Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.
  Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.
  Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee's incremental borrowing rate will be used.
  Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.
20. Employee benefits
  1. Short-term employee benefits
    Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.
  2. Retirement benefits
    Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.
    Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liabilities are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in other equity and will not be reclassified to profit or loss.
    Net defined benefit liabilities represent the actual deficit in the Group's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.
  3. Termination benefits
    A liability for a termination benefit is recognized at the earlier of when the Group can no longer withdraw the offer of the termination benefit and when the Group recognizes any related restructuring costs.
21. Share-based payment arrangements
  The fair value at the grant date of the employee share options granted to employees and others providing similar services is expensed on a straight-line basis over the vesting period, based on the Group's best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options. The expense is recognized in full at the grant date if the grants are vested immediately. The grant date of the parent company's issued ordinary shares for cash which are reserved for employees is the date on which the board of directors approves the transaction.
22. Income tax expense
  Income tax expense represents the sum of the tax currently payable and deferred tax.
  1. Current tax
    Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.
    According to the Income Tax Act in the R.O.C., an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.
    Adjustments of prior years' tax liabilities are added to or deducted from the current year's tax provision.
  2. Deferred tax
    Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
    Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
    Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and such temporary differences are expected to reverse in the foreseeable future.
    The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
    Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
    The Group has applied the exception from the recognition and disclosure of deferred tax assets and liabilities relating to Pillar Two income taxes. Accordingly, the Group neither recognizes nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes.
  3. Current and deferred taxes
    Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.
MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group's accounting policies, management is required to make judgments, estimations, and assumptions on the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.
When developing material accounting estimates, the Group considers the possible impact of catastrophe on the cash flow projection and other relevant material estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Material Accounting Judgments
Adequacy test on loss reserve
Loss reserves are estimated for possible claims of both filed but not yet paid and not yet filed of all insurance contracts. Such estimates are made based on historical data, actuarial analysis, financing modeling and other analytical techniques and are adjusted when necessary; however, the actual results may differ from these estimates.

CASH AND CASH EQUIVALENTS

December 31

2025		2024
Cash on hand	$ 25,130	$ 31,258
Checking accounts and demand deposits Cash equivalents (investments with original maturities of less than 3	4,696,452	2,828,564
months)
Time deposits	4,805,834	4,811,491
Short-term notes	5,757,682	3,502,871
	$ 15,285,098	$ 11,174,184

FINANCIAL INSTRUMENTS AT FVTPL

December 31

2025 2024

Financial assets mandatorily classified as at FVTPL Derivative financial assets (not under hedge accounting)

Currency swaps contract Non-derivative financial assets	$ 37,087	$ -
Listed shares	10,065,542	7,743,911
Beneficiary certificates	4,300,969	6,493,778
Financial bonds	276,637	258,337
	$ 14,680,235	$ 14,496,026
Financial liabilities held for trading

Derivative financial liabilities (not under hedge accounting)

Currency swaps contract $ 213,942 $ 224,161

At the end of the reporting period, outstanding foreign exchange swaps contract not under hedge accounting were as follows:
Currency Maturity Date Notional Amount (In Thousands)
December 31, 2025
Currency swaps contract USD/NTD 2026.01.13-2026.12.18 USD 219,900 December 31, 2024
Currency swaps contract USD/NTD 2025.01.13-2025.12.18 USD 173,600
The Group entered into currency swaps contract to manage exposures to exchange rate fluctuations of foreign currency-denominated assets and liabilities.
The financial assets at FVTPL were not pledged.

The Group elects to present the profit or loss of the designated financial assets in the overlay approach under IFRS 4. Financial assets designated to apply overlay approach by the Group for investing activities relating to insurance contracts issued by the Group are as follows:

December 31

	2025	2024
Financial assets at FVTPL Listed shares	$ 10,065,542	$ 7,743,911
Beneficiary certificates	4,300,969	6,493,778
Financial bonds	276,637	258,337

Reclassification from profit or loss to other comprehensive income of the financial assets designated to apply overlay approach for the years ended December 31, 2025 and 2024 were as follows:

For the Year Ended December 31

	2025	2024
Gain due to application of IFRS 9 to profit or loss	$ (946,242)	$ (1,247,027)
Gain if applying IAS 39 to profit or loss	1,146,546	795,643
Gain (loss) from reclassification using the overlay approach	$ 200,304	$ (451,384)

Due to application of overlay approach, the amount of gain and loss on financial assets and liabilities at FVTPL increase from gain of $948,254 thousand to gain of $1,148,558 thousand and decreased from gain of $678,426 thousand to gain of $227,042 thousand for the years ended December 31, 2025 and 2024, respectively.

FINANCIAL ASSETS AT FVTOCI
December 31
2025 2024
Investments in debt instruments at FVTOCI Domestic investments
Government bonds $ 653,324 $ 654,599
1. Refer to Note 26 for information relating to the credit risk management and impairment of investments in debt instruments at FVTOCI.
2. The financial assets at FVTOCI were not pledged as collateral.

FINANCIAL ASSETS AT AMORTIZED COST

December 31

	2025	2024
Corporate bonds	$ 1,699,988	$ 1,599,987
Government bonds	900,144	949,930
Financial bonds	200,000	200,000
Foreign bonds	8,864,386	7,603,611
	11,664,518	10,353,528
		(Continued)

December 31

	2025	2024
Less: Deposits in the Central Bank	$ (299,897)	$ (299,749)
Less: Loss allowance	(14,141)	(14,054)
	$ 11,350,480	$ 10,039,725

(Concluded)

The Group's gains on disposal of bonds resulting from repayments at maturities for the years ended December 31, 2025 and 2024 were $5,073 thousand and $220 thousand, respectively.
Refer to Note 26 for information relating to their credit risk management and impairment.
The financial assets at amortized cost were not pledged.

LOANS

December 31

	2025	2024
Secured loans	$ 69,775	$ 97,850
Less: Loss allowance	(987)	(1,399)
	$ 68,788	$ 96,451

Secured loans are secured by property and equipment. The Group applied IFRS 9 and assessed impairment in accordance with the regulation of "Guidelines for Handling Assessment of Assets, Loans Overdue, Receivable on Demand and Bad Debts by Insurance Enterprises". Refer to Note 26 for information relating to the credit risk management and impairment for the years ended December 31, 2025 and 2024.

RECEIVABLES

December 31

	2025	2024
Notes receivable	$ 181,126	$ 192,200
Premiums receivables	2,751,247	2,744,520
Other receivables	542,476	442,148
	3,474,849	3,378,868
Less: Loss allowance	(40,947)	(40,056)
	$ 3,433,902	$ 3,338,812

The allowance for impairment loss was reconciled as follows:

For the Year Ended December 31
		2025	2024
	Beginning balance	$ 40,056	$ 40,438
	Impairment losses recognized (reversed)	891	(382)
	Ending balance	$ 40,947	$ 40,056
12.	REINSURANCE ASSETS
December 31
		2025	2024
Claims and payments recoverable from reinsurers, net		$ 663,125	$ 665,331
Due from reinsurers and ceding companies, net Reinsurance reserve assets Ceded unearned premium reserve		2,696,694 6,399,332	1,891,740 6,512,085
Ceded loss reserve		16,242,781	8,243,568
		$ 26,001,932	$ 17,312,724

Claims and payments recoverable from reinsurers

December 31

	2025	2024
Gross carrying amount	$ 669,921	$ 672,052
Less: Loss allowance	(6,796)	(6,721)
	$ 663,125	$ 665,331
The allowance for impairment loss was reconciled as follows:
	For the Year End 2025	ed December 31 2024
Beginning balance	$ 6,721	$ 8,439
Impairment losses recognized (reversed)	75	(1,718)
Ending balance	$ 6,796	$ 6,721
b. Due from reinsurers and ceding companies
December 31
	2025	2024
Gross carrying amount	$ 3,018,933	$ 2,200,214
Less: Loss allowance	(322,239)	(308,474)
	$ 2,696,694	$ 1,891,740

The allowance for impairment loss was reconciled as follows:

For the Year Ended December 31

	2025	2024
Beginning balance	$ 308,474	$ 189,422
Impairment losses recognized	13,765	119,052
Ending balance	$ 322,239	$ 308,474

SUBSIDIARIES
Subsidiaries included in the consolidated financial statements:
Proportion of
Ownership (%)
December 31
Investor Investee Nature of Activities 2025 2024
Cathay Century Insurance Co., Ltd.
Cathay Insurance Co., Ltd. (Vietnam)
Operating non-life insurance business
100 100
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

	2025	2024
Investments in associates	$ 2,553,784	$ 2,406,891
Aggregate information of associates that are not individually material
	For the Year En 2025	ded December 3 2024
The Group's share of: Profit (loss) from continuing operations	$ 147,226	$ (126,818)
Other comprehensive (loss) income	(333)	216,132
Total comprehensive income for the year	$ 146,893	$ 89,314

December 31

Investments were calculated based on financial statements which have not been audited. Management believes there is no material impact on the equity method of accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements which have not been audited.

The investments accounted for using the equity method were not pledged.

15.	PROPERTY AND EQUIPMENT
		Computer	Other	Prepayments
		Equipment	Equipment	for Equipment	Total
	Cost
	Balance on January 1, 2024	$ 782,198	$ 253,437	$ 49,466	$ 1,085,101
	Additions	30,654	69,612	64,898	165,164
	Disposals	(5,181)	(28,965)	-	(34,146)
	Reclassification	40,850	-	(53,299)	(12,449)
	Foreign exchange	-	1,062	-	1,062
	Balance on December 31, 2024	$ 848,521	$ 295,146	$ 61,065	$ 1,204,732
	Accumulated depreciation and
	impairment
	Balance on January 1, 2024	$ 446,204	$ 172,740	$ -	$ 618,944
	Depreciation expense	127,485	27,521	-	155,006
	Disposals	(5,180)	(28,818)	-	(33,998)
	Foreign exchange	-	1,026	-	1,026
	Balance on December 31, 2024	$ 568,509	$ 172,469	$ -	$ 740,978
	Carrying amounts on December 31, 2024	$ 280,012	$ 122,677	$ 61,065	$ 463,754
	Cost
	Balance on January 1, 2025	$ 848,521	$ 295,146	$ 61,065	$ 1,204,732
	Additions	27,188	27,133	12,071	66,392
	Disposals	(1,902)	(17,424)	-	(19,326)
	Reclassification	22,620	4,600	(71,522)	(44,302)
	Foreign exchange	-	(5,467)	-	(5,467)
	Balance on December 31, 2025	$ 896,427	$ 303,988	$ 1,614	$ 1,202,029
	Accumulated depreciation and
	impairment
	Balance on January 1, 2025	$ 568,509	$ 172,469	$ -	$ 740,978
	Depreciation expense	130,173	39,729	-	169,902
	Disposals	(1,902)	(17,401)	-	(19,303)
	Foreign exchange	-	(5,282)	-	(5,282)
	Balance on December 31, 2025	$ 696,780	$ 189,515	$ -	$ 886,295
	Carrying amounts on December 31, 2025	$ 199,647	$ 114,473	$ 1,614	$ 315,734

The above items of property and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Computer equipment 3-5 years

Other equipment 3-5 years

LEASE ARRANGEMENTS

Right-of-use assets

December 31

	2025	2024
Carrying amounts
Buildings	$ 289,017	$ 187,982
Transportation equipment	10,596	9,417
	$ 299,613	$ 197,399
Additions to right-of-use assets	$ 277,161	$ 90,309
Depreciation charge for right-of-use assets Buildings	$ 168,107	$ 160,200
Transportation equipment	3,186	2,906
	$ 171,293	$ 163,106

Lease liabilities

December 31

2025

2024

Carrying amounts

Range of discount rates for lease liabilities was as follows:

$ 300,801

$ 197,630

December 31

2025 2024

Buildings 1.13%-8.57% 1.12%-8.57%

Transportation equipment 1.96%-2.76% 2.15%-2.76%

Other lease information

For the Year Ended December 31 2025 2024

Expenses relating to short-term leases $ 24,592 $ 34,366

Total cash outflow for leases $ 199,370 $ 200,259

The Group leases certain transportation equipment and buildings which qualify as short-term leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

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Cathay Financial Holding Co. Ltd. published this content on May 05, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 05, 2026 at 14:14 UTC.

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Apr. 07	Cathay Financial launches long-term strategic cooperation with OpenAI	RE
Mar. 30	Fubon Securities Upgrades Cathay Financial to Buy from Neutral; Price Target is NT$83	MT
Mar. 27	Cathay Financial Holding Co., Ltd., Q4 2025 Earnings Call, Mar 27, 2026
Mar. 27	Cathay Financial will review lending positions in event of prolonged Middle East conflict	RE
Mar. 16	Cathay Financial Holding Co., Ltd. Reports Earnings Results for the Full Year Ended December 31, 2025	CI
Mar. 13	Fubon Financial February net profit T$20.57 billion	RE

Chart Cathay Financial Holding Co., Ltd.

Duration

Period

Chart Cathay Financial Holding Co., Ltd.

2882: Dynamic Chart

Company Profile

Cathay Financial Holding Co Ltd is a Taiwan-based financial holding company principally engaged in the investment and the management of investment business. The Company operates through five business segments. Banking Operating segment engages in commercial bank businesses, including foreign exchange business, guarantee business, and others. Life Insurance Operating segment engages in interest-sensitive sales of traditional insurance, investment-linked insurance and providing financial planning services. Property Insurance Operating segment engages in fire insurance, marine insurance, land and air insurance, liability insurance, and other insurance. Securities Operating segment engages in brokerage, dealership, and underwriting business. Other Operating segment includes assets, liabilities, revenue and expenditures which cannot be directly attributable to or reasonably allocated to certain operating segments.

Employees

51,797

Sector

Life & Health Insurance

Calendar

Jun. 30 - Ex-dividend date - 3.5 TWD

More about the company