AM Best Affirms Credit Ratings of Hotai Insurance Co., Ltd.

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 Hotai Insurance Co., Ltd. (Hotai Insurance) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Hotai 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.

Hotai Insurance’s balance sheet strength assessment has improved from strong to very strong level, supported by its risk-adjusted capitalisation that improved to the strongest level in 2025, as measured by Best’s Capital Adequacy Ratio (BCAR). Moreover, Hotai Insurance’s reported capital and surplus (C&S) grew strongly during the year, as well as has recovered to pre-COVID-19 levels, thanks to the full retention of net profits. C&S increased further in the first half of 2026, recording another double-digit expansion. Going forward, AM Best expects Hotai Insurance’s capital position will continue to strengthen from earnings growth. Other supportive factors of the balance sheet strength include Hotai Insurance’s diversified investment portfolio, which focuses on low-risk fixed-income securities, comprehensive reinsurance arrangements, good liquidity and financial flexibility.

Hotai Insurance reported a net profit of TWD 2.4 billion in 2025, underpinned by favourable technical results from the underwriting portfolio and positive investment returns. The company’s loss ratio in 2025, was lower than the pre-COVID-19 levels, while the commission and overall expense ratios remained at a lower than industry-average levels. Additionally, Hotai Insurance achieved a strong net profit of TWD 3.0 billion in the first half of 2026, largely contributed by the favourable investment return derived from capital gains.

Leveraging its long-standing relationship with Toyota Motor Corporation, Hotai Insurance’s ultimate parent, Ho Tai Motor Co., Ltd (Ho Tai Motor) has been the top automotive distributor in Taiwan. In AM Best’s view, Hotai Insurance continues to benefit from being a strategic entity within Ho Tai Motor’s business ecosystem. Hotai Insurance’s market ranking improved from eighth in 2020, to sixth in 2025, in terms of direct premiums written, backed by robust growth in the voluntary motor business with the support of Ho Tai Motor’s extensive network of car dealers. Hotai Insurance is actively expanding its commercial lines business, while being selective on mega risks and the accident and health business, with an aim to achieve a balanced and high-quality underwriting portfolio.

Positive rating actions could occur if there is a material and sustained improvement in Hotai Insurance’s balance sheet strength assessment. Positive rating actions also could occur if Hotai Insurance is able to achieve sustained improvement in its operating performance, while its balance sheet strength fundamentals remain robust. Negative rating actions could occur if there is a significant deterioration in the company’s balance sheet strength fundamentals.

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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