AM Best Affirms Credit Ratings of Shinkong Insurance Company Limited

·3 min read

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" of Shinkong Insurance Company Limited (Shinkong Insurance) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Shinkong Insurance’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Shinkong Insurance’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level in 2020. In the past five years, the company’s capital and surplus has grown organically by 43%, mainly attributed to profit retention and the accumulation of special reserves. The company’s investment strategy remains conservative, with a majority of the invested assets in low risk fixed-income assets to generate stable investment income to support the company’s overall operating results. The company’s dependency on reinsurance remains moderate, with the reinsurers panel in good credit quality.

Shinkong Insurance’s operating results remained stable and positive in 2020, supported by positive underwriting and investment results. The company’s underwriting experience remained stable and favourable, with the net combined ratio (excluding compulsory auto) remaining close to 90% over the past few years. Despite the volatility in the investment market in early 2020, the company’s overall investment results remained positive and stable in 2020, attributed to the stable stream of interest, dividend and rental income to support the company’s overall operating results. Notwithstanding, a partially offsetting factor is the decreasing trend in the company’s compulsory auto liability insurance special reserves over the past few years. Going forward, potential unfavourable underwriting experience in this line of business will impact the company’s operating performance directly.

Shinkong Insurance remains the third-largest insurer in Taiwan’s non-life insurance market in terms of gross premium written. The company’s underwriting portfolio remains moderately diversified, with a majority of its business in motor, whilst it continued to refine its underwriting portfolio in 2020 through faster expansion in non-motor product lines to achieve a more diversified underwriting portfolio. The company’s distribution remains stable and diversified; Shinkong Insurance uses a direct and affiliated insurance agency channel, with a good level of control to distribute its products.

Whilst Shinkong Insurance is well-positioned at its current rating level, negative rating actions could occur if the company exhibits a material and sustained deterioration in operating performance, or if there is a substantial decline in its risk-adjusted capitalisation.

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

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

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

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Paul Lam
Financial Analyst
+852 2827 3402

James Chan
Associate Director
+852 2827 3418

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644