The new Taiwan Insurance Solvency framework is credit positive for Taiwanese life insurers managing their asset-liability mismatch and interest rate, S&P Global Ratings said in a Tuesday release.
The framework encourages life insurers to retain strong asset-liability management in terms of duration and cash flow, the rating agency said.
Life insurers will keep narrower asset-liability mismatch under the new regime that reduces their interest rate shock exposure, credit analyst Patty Wang said.
Tighter asset-liability management will lessen capital gain chances for some insurers, but the benefits from the new regime have better value compared to short-term gains, the analyst said.
Taiwan's life insurers have also made stride to prevent unnecessary future risk on top of the 15-year transition period specified by the local regulator, S&P said.