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Taiwan: Central Re's capital adequacy level expected to stay strong

Source: Asia Insurance Review | Jan 2020

Taiwanese reinsurer, Central Re, is likely to maintain its extremely strong capital adequacy level, given its solid domestic market position, and a moderate risk appetite over the next one-two years, said S&P Global Ratings.
The international credit rating agency, giving its views on rated Asia Pacific dedicated reinsurers, of which Central Re is one, said, “We also expect underwriting performance to remain stable, with combined ratio of 95%-97% amid conservative risk retention. The company reported a combined ratio of about 93% in 2018, compared with 92% in the previous year. The good underwriting performance reflects Central Re’s prudent control of its loss ratio by actively adjusting and diversifying its portfolio.” 
Central Re is viewed as a strong player in Taiwan’s reinsurance market. It has close relationships with local insurers, a solid domestic market position, and is the only domestic reinsurer in the local market. However, it has a small regional and global market presence, and its size is small compared with those of international peers. 
The reinsurer’s underwriting performance for its growing overseas business also remained profitable. S&P expects Central Re to remain prudent in exploring the international reinsurance market. A 
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