Fitch Rates New Century Life 'A+' with Positive Outlook, Citing Strong Capitalization and Expected CSM Growth
18 April 2025 路 Uncategorized 路
Fitch Ratings announced upgrades to New Century Life Insurance鈥檚 financial strength rating from BBB+(twn) to A+(twn), and its long-term local currency issuer default rating (IDR) from A(twn). The outlook is positive. Additionally, the agency raised its assessment of NT$ subordinated corporate bonds issued by New Century Life Insurance Co., Ltd. to A-(twn).
These ratings reflect that New Century Life Insurance is a robust life insurance company with diversified distribution channels and product offerings, demonstrating solid business foundations and market competitiveness. In 2024, the insurer initiated its largest-ever restructuring plan for sales agents since its establishment in 1987鈥攖he only one among major competitors to achieve positive growth in registered agent numbers.
Operationally, New Century Life Insurance continues to implement a value-stacking strategy focused on accumulating Contractual Service Margin (CSM). Over recent years, the company has consistently exceeded annual targets of NT$30 billion; in 2024 alone, CSM reached NT$385 billion with an annual growth rate of 23%. Integrated strategies across distribution channels, product design, administrative support, and marketing plans for 2025 are expected to drive significant further CSM growth.
Profitability benefited from a substantial increase in post-risk-adjusted investment returns in 2024. The overall consolidated net profit after tax reached NT$102.3 billion鈥攁 considerable improvement compared to the previous two years (2022 and 2023). Capital strength was bolstered by robust growth in new business sales, increased investment income, and a capital injection of NT$208.6 billion from New Century Financial Holding Co., Ltd.
Looking ahead to regulatory changes鈥攕pecifically the implementation of the next generation solvency regime (TW-ICS) starting in 2026鈥擭ew Century Life Insurance plans to apply for transitional measures introduced by regulators, and expects its solvency ratio under TW-ICS will exceed 150%. The company also received approval from the Financial Supervisory Commission on April 10th this year to establish a wholly-owned special purpose vehicle (SPV) abroad, aimed at enhancing capital flexibility.
New Century Life Insurance emphasizes that with strong brand recognition and nearly nine million valid policies, merging with TransAsia Life will create more balanced distribution structures and business growth momentum, further increasing market share and customer base while securing stronger competitive positions.
These ratings reflect that New Century Life Insurance is a robust life insurance company with diversified distribution channels and product offerings, demonstrating solid business foundations and market competitiveness. In 2024, the insurer initiated its largest-ever restructuring plan for sales agents since its establishment in 1987鈥攖he only one among major competitors to achieve positive growth in registered agent numbers.
Operationally, New Century Life Insurance continues to implement a value-stacking strategy focused on accumulating Contractual Service Margin (CSM). Over recent years, the company has consistently exceeded annual targets of NT$30 billion; in 2024 alone, CSM reached NT$385 billion with an annual growth rate of 23%. Integrated strategies across distribution channels, product design, administrative support, and marketing plans for 2025 are expected to drive significant further CSM growth.
Profitability benefited from a substantial increase in post-risk-adjusted investment returns in 2024. The overall consolidated net profit after tax reached NT$102.3 billion鈥攁 considerable improvement compared to the previous two years (2022 and 2023). Capital strength was bolstered by robust growth in new business sales, increased investment income, and a capital injection of NT$208.6 billion from New Century Financial Holding Co., Ltd.
Looking ahead to regulatory changes鈥攕pecifically the implementation of the next generation solvency regime (TW-ICS) starting in 2026鈥擭ew Century Life Insurance plans to apply for transitional measures introduced by regulators, and expects its solvency ratio under TW-ICS will exceed 150%. The company also received approval from the Financial Supervisory Commission on April 10th this year to establish a wholly-owned special purpose vehicle (SPV) abroad, aimed at enhancing capital flexibility.
New Century Life Insurance emphasizes that with strong brand recognition and nearly nine million valid policies, merging with TransAsia Life will create more balanced distribution structures and business growth momentum, further increasing market share and customer base while securing stronger competitive positions.