Fitch Ratings has affirmed Taiwan-based KGI Life Insurance Co., Ltd.'s (formally China Life Insurance Co., Ltd.) Insurer Financial Strength (IFS) Rating at 'A' (Strong) and National IFS Rating at 'AA+(twn)'.

The Outlook is Stable.

The ratings reflect KGI Life's 'Favourable' company profile, 'Strong' capitalisation and 'Strong' financial performance. It also takes into consideration the challenges the insurer faces in maintaining its business presence and operating performance amid market volatility and intense competition.

Key Rating Drivers

'Favourable' Company Profile: We assess KGI Life's company profile as 'Favourable' compared with all other local life insurers, based on its 'Favourable' operating scale, substantive business franchise and 'Moderate/Favourable' corporate governance. Accordingly, we score the company profile at 'a-' under our credit-factor scoring guidelines.

KGI Life is Taiwan's fifth-largest insurer, with a market share of about 8% by premium income in 2022, and a comprehensive range of protection, savings, healthcare and retirement products. KGI Life's established distribution channels include bancassurance through KGI Bank and other Taiwanese banks, which accounted for 58% of first-year premiums in 1H23, more than 16,000 tied agents (19%), brokers (8%) and direct sales.

'Strong' Capitalisation and Low Leverage: We expect KGI Life to maintain its regulatory risk-based capital (RBC) ratio well above the regulatory minimum of 200%. Its ratio was 340% at 9M23 and 280% at end-2022. If interest rate movements are considered in the valuation of insurance liability, we believe its capitalisation, measured by the Fitch Prism Model, would be in the 'Strong' category in 1H23, supported by stable morbidity and mortality profits and sustained loss-absorbing reserves. The financial leverage ratio was low at 6.3% in 9M23, despite TWD10 billion in subordinated debt issued in July 2023.

'Strong' Financial Performance: We expect KGI Life's underwriting profitability to remain stable, supported by a shift to higher-margin protection products. However, earnings might be subject to volatility amid investment performance fluctuations stemming from a challenging market environment. Annualised return on equity for 9M23 was 13.6%, with a three-year average of 12.8%. KGI Life's focus on regular-premium policies with sustainable profit margins, such as protection-type products, has driven long-term VNB growth and expanded its VNB margin to 34.3% in 1H23, up from 27.1% in 1H22.

'Good' Investment and Asset Risk: We do not expect KGI Life to increase its equity-type investments substantially and to manage asset risk appropriately amid market volatility. Its risky assets, including listed and unlisted stocks, equity-type mutual funds, preferred shares and below-investment-grade bonds, were equivalent to 111% of shareholder equity and loss-absorbing reserves at end-1H23 (end-2022: 119%), mainly due to its equity exposure.

The decline in the risky-asset ratio from 165% in 1H22 followed an improved equity base. KGI Life did not make a significant reduction in the amount of risky assets and has limited exposure to below-investment-grade investments.


Factors that could, individually or collectively, lead to negative rating action/downgrade:

Failure to maintain a 'Strong' capital score, measured by the Fitch Prism Model, for a prolonged period

Decline in profitability, with return on equity falling to below 9.5% for a sustained period

Persistent weakening in the company profile in terms of corporate governance, business scale and diversification.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Improvement in the Fitch Prism Model score into the 'Very Strong' category for a sustained period

Increase in return on equity to above 15% for a prolonged period

Material improvement in the company profile in terms of business scale and diversification.


The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit

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