AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (ICR) of “a+” (Excellent) 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 strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

AM Best expects Shinkong Insurance’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at the strongest level in 2025 and prospectively, supported by strong earnings generation and consistent capital management. The balance sheet strength assessment also benefits from the company’s conservative investment strategy, prudent reserving practices, and comprehensive reinsurance programme. Financial flexibility is considered to be supportive of the balance sheet strength fundamentals due to the company’s good access to capital markets. Shinkong Insurance maintains its statutory risk-based capital ratio at a healthy level.

Shinkong Insurance’s operating performance remains robust, demonstrated by a five-year weighted average return-on-equity ratio of 14.8% and a net combined ratio of 87.5% (2021-2025), as calculated by AM Best. The company reported favourable operating results in 2025, driven by solid underwriting profitability, with the net combined ratio edging down to a record low of 82.2%. Shinkong Insurance’s investment returns have been stable, bolstered by recurring interest and dividend income. AM Best expects Shinkong Insurance’s operating performance to remain strong over the intermediate term, supported by strict underwriting discipline, effective expense management, and positive investment returns.

Shinkong Insurance is the third-largest insurer in Taiwan’s non-life insurance market based on gross premiums written. The underwriting portfolio is moderately diversified, with motor insurance constituting approximately half of premiums written. The company’s distribution channel mix remains stable with its direct channel continuing to be the largest contributor. The appropriate ERM assessment is underpinned by Shinkong Insurance’s robust risk culture and developed ERM framework.

Negative rating actions could occur if Shinkong Insurance’s profitability declines materially and is no longer supportive of its strong operating performance assessment. Negative rating actions could also arise if the company’s balance sheet strength fundamentals deteriorate materially. While deemed unlikely in the intermediate term, positive rating actions could occur if the company demonstrates sustained improvement in its competitive position and materially expands its market share through continued profitable growth.