S&P cuts Taiwan insurance company views

Standard & Poor's said it revised the outlooks to negative and affirmed the ratings on the following various Taiwan-based life insurance companies.

The agency said it lowered the outlook and affirmed the counterparty credit ratings on Cathay Life Insurance Co. Ltd., Fubon Life Insurance Co. Ltd., Shin Kong Life Insurance Co. Ltd. and Taiwan Life Insurance Co. Ltd.

The agency also revised the outlooks on the long-term credit ratings on the insurers' three holding companies and four affiliated companies relating to these holding companies. Those companies are Cathay Financial Holding Co. Ltd., Cathay Century Insurance Co. Ltd., Fubon Financial Holding Co. Ltd., Fubon Insurance Co. Ltd., Fubon Bank (Hong Kong) Ltd., Shin Kong Financial Holding Co. Ltd. and Taiwan Shin Kong Commercial Bank Co. Ltd.

At the same time, the agency said it lowered the Greater China credit scale ratings on the following eight entities: Cathay Life Insurance Co. Ltd., Cathay Century Insurance Co. Ltd., Fubon Life Insurance Co. Ltd., Fubon Insurance Co. Ltd., Shin Kong Life Insurance Co. Ltd., Taiwan Shin Kong Commercial Bank Co. Ltd. and Taiwan Life Insurance Co. Ltd.

S&P said the outlook revisions reflect its view of the heightened pressures on life insurers' credit profiles due to the current macroeconomic slowdown. Under S&P's assessment of the life insurers' higher risky investment exposures, the persistent low interest rate environment and Taiwan's slow GDP growth prospects, the agency said the insurers are likely to experience a longer period of volatile capitalization and low earnings than originally expected.

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