S&P’s Affirms ‘BBB+’ Ratings on Taiwan’s Central Re

August 1, 2002

Standard & Poor’s Ratings Services affirmed its triple-‘B’-plus insurer financial strength and counter party credit ratings on Central Reinsurance Corp. (Central Re). The outlook on the counter party credit rating is stable.

The ratings reflect the company’s strong market position, stable operating performance, and good liquidity. S&P’s noted that these factors are counterbalanced by the company’s reduced solvency due to its significant growth over the past two years.

Central Re is the only reinsurance company in the Taiwan insurance sector writing both life and non-life reinsurance. The company has undergone partial privatization and is now 48 percent held by the Ministry of Finance compared with 71 percent before an auction of shares in the company in July 2002. The company was listed on the Taiwan Stock Exchange in July 2000 and is now mainly held by the public and institutions.

In 2001, the company’s gross premiums grew by 16 percent and its net premiums by 26 percent, due to hardening of the reinsurance market. The company mainly writes domestic and proportional treaties and has a relatively short tail reinsurance business portfolio comprised of classes such as motor and personal accident reinsurance.

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