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South China Insurance Maintains Strong Capital Position in 2024

by Celia

South China Insurance, based in Taiwan, is poised to maintain its solid financial standing and operational stability in the near to medium term, according to AM Best’s latest assessment.

The insurer’s balance sheet remains strong, bolstered by the highest level of risk-adjusted capitalisation, as indicated by AM Best’s Capital Adequacy Ratio (BCAR) at the close of 2023. The company’s adjusted capital and surplus surged by 23% year-on-year, reaching $277 million (TW$8,458 million), fueled by a recovery in unrealised capital losses, retention of net profits, and prudent reserve provisioning for non-compulsory auto liability insurance.

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This positive trend continued into the first nine months of 2024, further enhancing the insurer’s balance sheet strength.

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AM Best forecasts that South China Insurance’s robust capital adequacy and balance sheet strength will continue to support its current ratings, citing its well-diversified and liquid investment portfolio, primarily consisting of investment-grade bonds and cash.

The company reported a net profit after tax of $27.69 million (TW$916 million) in 2023, driven by improved underwriting and investment results. For the first three quarters of 2024, South China Insurance posted a profit of $36 million (TW$1.18 billion).

The growth in gross premiums, particularly from motor and commercial fire products, along with a reduction in loss ratios across key business segments, contributed to stronger underwriting performance in 2023. Additionally, investment income from interest and dividends helped bolster the company’s earnings.

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With a strong capital base and sound financial management, South China Insurance remains well-positioned for continued stability and growth in the coming years.

($1.00 = TW$33.09)

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