AM Best Affirms Credit Ratings of Union Insurance Company Limited

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Union Insurance Company Limited (Union) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Union’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 (ERM).

Union’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the strongest level as of year-end 2025. AM Best expects Union’s risk-adjusted capitalisation to remain at the strongest level over the intermediate term, supported by partial retention of positive operating earnings. Union’s regulatory solvency capital is expected to maintain a healthy capital buffer above the minimum requirements. Other supporting factors include a comprehensive reinsurance programme, favourable financial flexibility, and a consistent investment strategy.

Union reported stable operating results in 2025, with a return on adjusted capital and surplus of 11.8%, based on AM Best’s calculations. The company’s top-line performance has remained stable, despite posting a slightly lower-than-average premium growth rate in its voluntary motor segment. Union has refined its underwriting strategy to improve profitability and actively expanded its business offerings including accident and health (A&H) and commercial liability. Underwriting profitability has improved consistently, with a record low net combined ratio of 91.1% in 2025, as calculated by AM Best. The company recorded a net investment yield of 3.0% (including capital gains and losses) last year, which was impacted moderately by foreign exchange volatility. Going forward, AM Best expects Union to maintain its asset allocation strategy with a focus on domestic fixed-income and equity investments to generate stable investment returns.

Union is a medium-sized insurer in Taiwan’s non-life market and ranked eighth in 2025, based on direct premiums written. Similar to other companies in the market, Union’s underwriting portfolio is diversified moderately but slightly skewed toward motor insurance, with its other key business lines being the commercial fire, liability, and A&H segments. The company has maintained a well-diversified distribution mix, with major business contributors being car dealers, the direct channel, and brokers. Union’s ERM is considered appropriate to support its risk profile.

Negative rating actions could occur if there is a material deterioration in Union’s operating performance. Positive rating actions may occur due to a sustained improvement in the company’s operating performance. While deemed unlikely over the near term, positive rating actions could arise if Union’s balance sheet strength fundamentals improve favourably.

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

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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 www.ambest.com.

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