Fubon Life Insurance

Date: 2026-05-15
Issuer: Fubon Life Insurance
Sector: Taiwan life insurance
Credit focus: issuer credit, insurer financial strength, insurance liabilities and investment assets, foreign-currency investments and FX hedging, RBC/TIS, IFRS 17, subordinated debt

1. Business Snapshot and Recent Developments

Fubon Life Insurance (“Fubon Life”) is a major Taiwanese life insurer under Fubon Financial Holding (“Fubon FHC”). For credit analysis, it should be viewed not as a bank or a general corporate, but as a Taiwanese life insurer that underwrites long-duration insurance liabilities and backs them with a very large portfolio of domestic and overseas investment assets. It is therefore necessary to assess premiums and net income together with guaranteed rates, surrender and persistency, claims, ALM, overseas fixed-income assets, FX hedging, regulatory capital, the transition to IFRS 17 / Taiwan Insurance Solvency (“TIS”), and the loss-absorption features of subordinated debt.

Fubon Life is a core subsidiary of the Fubon FHC group, alongside other key businesses such as Taipei Fubon Bank, Fubon Insurance, Fubon Securities and Fubon Asset Management. Fubon FHC’s company overview describes the group as providing a broad range of financial services, including life insurance, banking, property and casualty insurance, securities and asset management, with total assets of NT$12.88tn and 2025 net income after tax of NT$120.94bn at end-2025. The group’s scale and cross-selling platform support Fubon Life’s distribution capability and capital-market access. However, Fubon FHC is not the guarantor of debt issued by Fubon Life or Fubon Life Singapore Pte. Ltd. For the 2025 US dollar subordinated bond, Fubon Life Singapore is the issuer, Fubon Life is the guarantor on a subordinated basis, and Fubon FHC is the parent company. Bond investors need to distinguish among group core status, the standalone financial strength of the insurer, and the SPV issuance, guarantee and subordination structure.

Operationally, Fubon Life maintained its position as a top-tier franchise in Taiwan’s life insurance market in 2025. Fubon Financial’s full-year 2025 investor presentation states that Fubon Life ranked first in the industry by net income and second by first-year premium, renewal premium and total premium in 2025. The same materials show 2025 first-year premium of NT$113.5bn, total premium of NT$367.4bn, first-year premium equivalent of NT$51.7bn and Value of New Business (“VNB”) of NT$25.3bn. This indicates that the company is not merely an investment vehicle, but also has a leading Taiwanese operating platform in policy acquisition and persistency.

At the same time, 2025 was a year in which both the “strong franchise” and “sensitivity to FX and market movements” were visible. In the 2025 audited consolidated financial statements, total assets were NT$6,388.7bn, insurance liabilities were NT$4,660.3bn and equity attributable to owners of the parent was NT$630.4bn. On the income statement, written premium was NT$351.2bn, retained earned premium was NT$345.4bn, interest income was NT$126.0bn and net income attributable to owners of the parent was NT$62.7bn. Net income was large in absolute terms, but fell significantly from NT$102.7bn in 2024. The main cause was not a breakdown in the operating franchise, but the large effect of FX, market movements and reserves on reported earnings.

In the 2025 financial statements, foreign exchange gains/losses on investments amounted to a loss of NT$80.2bn, while the net change in reserve for foreign exchange valuation was negative NT$112.6bn. On the balance sheet, the reserve for foreign exchange valuation rose sharply from NT$21.5bn at end-2024 to NT$142.1bn at end-2025. Fubon Financial’s December 2025 earnings release also explains that, in June 2025, Fubon Life applied the regulation on “adjustments to the basis for calculating life insurers’ liability reserves” and, in accordance with regulatory instructions, temporarily added approximately NT$28.1bn, equivalent to 30% of 2025 pre-tax profit, to the foreign exchange price fluctuation reserve. This illustrates that Taiwanese life insurers’ foreign-currency assets and Taiwan dollar movements directly affect both earnings and capital.

The major change after the start of 2026 is the Taiwanese insurance industry’s transition to IFRS 17 and the new TIS capital regime. From January 2026, the presentation of insurance contract liabilities, financial-asset classification, net income, other comprehensive income, distributable earnings and capital metrics changes. Fubon Financial’s monthly earnings releases from January to April 2026 disclose both post-IFRS 17 net income and adjusted profit including gains and losses on FVOCI equity disposals. In the April 2026 self-reported results, Fubon Life reported April net income after tax of NT$30.95bn, cumulative net income after tax of NT$46.06bn for January-April 2026, and cumulative adjusted profit of NT$94.50bn after including FVOCI equity disposal gains and losses. Monthly self-reported figures are not audited annual financial statements, but they indicate that, even after IFRS 17, CSM amortisation, recurring investment income and gains on sales of equities and funds are supporting earnings.

At the same time, the April 2026 release also notes that the Taiwan dollar appreciated by approximately 1% against the US dollar and that the company stated FX movements could be addressed by its substantial foreign exchange price fluctuation reserve. Insurance sales through April 2026 also remained strong: Fubon Life’s standalone cumulative first-year premium for January-April 2026 was NT$57.34bn, total premium was NT$150.17bn and first-year premium equivalent was NT$20.56bn, each expected to rank second in the industry. This is positive in the near term, but for credit analysis it is necessary to separate the support to earnings from strong equity markets, FVOCI disposal gains and FX assumptions.

The current company profile is that of a high-quality insurance issuer with one of Taiwan’s leading life insurance franchises, Fubon FHC’s distribution platform, international ratings in the A category, a substantial FX reserve and strong legacy RBC. On the other hand, overseas fixed-income assets, Taiwan dollar movements, hedging costs, the IFRS 17/TIS transition, insurance-liability remeasurement and subordinated capital debt all affect the ceiling on the credit assessment. Investors should distinguish between the strength of issuer credit, the presentation of earnings, economic capital headroom and security terms.

2. Industry Position and Franchise Strength

Taiwan’s life insurance market includes long-term savings, protection, health and accident, foreign-currency policies, investment-linked policies, annuities and participating policies. Distribution capabilities through agents, bancassurance, digital channels and group channels are key competitive factors. At the same time, many Taiwanese life insurers hold large foreign-currency assets, including overseas bonds, so credit strength cannot be assessed by premium share alone. Currency mismatches between assets and liabilities, hedging costs, FX reserves, RBC/TIS and interest-rate movements flow through to capital and earnings.

Fubon Life’s franchise is clearly top-tier in Taiwan’s life insurance market. The full-year 2025 investor presentation states that the company ranked first in the Taiwanese life insurance industry by net income and second by total premium, first-year premium and renewal premium in 2025. In its November 2025 rating action, Fitch treated the company profile as close to the highest assessment category and stated that, as of 2024, Fubon Life was Taiwan’s second-largest insurer, with a 15% share of total premium and a 13% share of new business premium. Company materials also show 2025 total premium of NT$367.4bn, a 14.0% share of total premium, more than 18,000 agents, and the second-largest tied-agent force as of 2024.

The strength of the distribution platform supports Fubon Life’s credit profile. Life insurance is a long-term contract business, and customer acquisition, persistency, product explanation, policy servicing, claims payment and complaint handling all affect brand strength and surrender rates. The 2025 investor presentation shows that 72.6% of Fubon Life’s first-year premium was generated from proprietary channels, including Taipei Fubon Bank and agents. This indicates greater distribution control than for issuers that rely only on external agencies. At the same time, bancassurance and agent sales affect expense ratios and future profits through commissions, sales quality, customer protection and product mix; the scale of the channel should not be viewed as purely positive on its own.

In product strategy, Fubon Life is shifting toward value-focused sales with IFRS 17 and TIS in mind. The 2025 investor presentation describes participating policies as the core growth driver and states that the company is raising the sales mix of high-CSM products such as regular-premium and protection-type products. The share of regular-premium products rose from 58.2% in 2024 to 60.8% in 2025, while the share of foreign-currency policies rose from 41.2% to 51.9%. Expanding foreign-currency policies works in the direction of increasing US dollar liabilities against US dollar assets and reducing asset-liability currency mismatches. However, it does not immediately eliminate the existing large stock of foreign-currency assets and Taiwan dollar liabilities, and customer explanation, FX volatility, sales regulation and product yields also require attention.

Persistency is also an important indicator of franchise quality. According to Fubon Life’s Financial Analysis public disclosure, the parent-only 13-month persistency ratio was 96.03% in 2023, 97.11% in 2024 and 97.12% in 2025, while the 25-month persistency ratio was 93.10%, 95.47% and 95.29%, respectively. High persistency indicates a stable policyholder base and better support for expense recovery and future profit visibility. Fitch also viewed stable surrender payments after the sharp Taiwan dollar appreciation positively in the context of removing the Rating Watch Negative. However, surrender rates are affected by interest rates, FX, competing products, sales quality and the economy, so normal-period persistency alone does not determine stressed liquidity.

Fubon Life’s market position is therefore a clear credit support, but this is not a simple case of “large scale equals safety”. The larger the insurance liabilities and investment assets, the greater the effect of interest rates, FX, equities, credit spreads and regulatory capital movements on capital. Fubon Life’s strength depends on whether it can continue to manage FX, ALM and market risk using distribution power, persistency, CSM accumulation, investment income and capital buffers.

3. Segment Assessment

For Fubon Life, segment assessment cannot be limited to a general corporate-style breakdown of revenue and operating profit by business division. The main analytical axes are product type, distribution channel, insurance liabilities, investment assets, overseas subsidiaries and capital consumption. Public information does not provide sufficient detail on profitability by product, guaranteed rates, claims ratios, surrender rates, reinsurance terms or product-level CSM. This section therefore organises the credit interpretation based on the product, channel and investment dimensions that can be confirmed.

The first axis is participating policies, regular-premium products, protection-type products and foreign-currency products. The 2025 investor presentation identifies participating products as the core growth driver, with first-year premium up 3.1% year on year, total premium up 1% year on year and VNB of NT$25.3bn. Product sales are shifting toward high-CSM products such as regular-premium and protection-type products, and the share of regular-premium products has risen to 60.8%. From a credit perspective, this appears positive because it indicates sales focused on long-term persistency, future profits and capital efficiency rather than merely gathering single-premium volume.

However, participating products and foreign-currency products are not a panacea. For participating policies, policyholder dividends, investment spread, mortality/morbidity margin, expense margin, investment performance, product explanation and long-term customer expectation management are important. Foreign-currency products can contribute to better matching of US dollar assets and US dollar liabilities, but they also involve policyholder FX risk, sales regulation, complaints and surrender behaviour. Fubon Life’s foreign-currency policy ratio rising to 51.9% in 2025 is positive as a direction of travel for reducing currency mismatch, but there is not yet enough information to conclude that the entire existing portfolio’s FX risk has been neutralised.

The second axis is protection-type, health and accident, and medical-related products. Fubon Financial’s April 2026 monthly release states that Fubon Life focused sales on high-CSM products such as protection-type and regular-premium products, and that individual health and accident insurance for January-April 2026 increased by 23% year on year. Health, accident and protection-type products may reduce dependence on interest-rate guarantees relative to savings-type products in a low-rate environment and may be better aligned with ageing demographics and medical protection demand. On the other hand, medical inflation, utilisation, repricing, reinsurance and claims ratios need to be checked, and sales growth alone does not prove profitability.

The third axis is distribution channel. In 2025, 72.6% of first-year premium came from proprietary channels, including Taipei Fubon Bank and agents. The agent channel supports customer relationships and the ability to explain insurance products, while bancassurance can leverage the Fubon FHC group’s customer base. In 2025, first-year premium from the agency channel increased by 17%, while bancassurance also focused on regular-premium products. This supports credit quality through distribution control and group synergies, but it remains necessary to monitor agent recruitment, training and compliance, bancassurance commissions, customer-protection regulation and the sustainability of product sales.

The fourth axis is investment assets. For a life insurer, the operating business that gathers premiums cannot be separated from the investment business that backs insurance liabilities. In the 2025 audited consolidated financial statements, FVTPL financial assets were NT$1,475.5bn, FVOCI financial assets were NT$449.7bn, financial assets measured at amortised cost were NT$2,751.6bn, investment property was NT$313.5bn, loans were NT$273.0bn and cash and cash equivalents were NT$390.7bn. The 2025 investor presentation states that overseas fixed-income assets consist mainly of North American investment-grade corporate bonds and financial bonds. Fixed-income assets support insurance liabilities, but they are highly exposed to US interest rates, credit spreads, rating migration, liquidity and FX hedging.

The fifth axis is overseas subsidiaries and geographic expansion. Fubon Financial’s company overview lists Fubon Life Insurance (Hong Kong), Fubon Life Insurance (Vietnam) and Fubon Hyundai Life Insurance. Overseas insurance businesses may provide growth opportunities and geographic diversification, but the centre of issuer credit remains the Taiwanese parent’s insurance liabilities and investment assets. The capital burden, earnings, regulatory position and dividend capacity of the overseas businesses have not been sufficiently confirmed in this report.

The overall segment conclusion is that Fubon Life should be viewed not only as a company that collects large amounts of premiums, but as a company whose credit profile depends on what type of insurance liabilities it carries and with what currency, duration, rating and liquidity profile of investment assets it backs them. The shift toward regular-premium, protection-type and foreign-currency products is positive for CSM, capital efficiency and currency matching, but without confirmation of product-level profitability, surrender, claims, ALM, hedging and TIS capital consumption, sales growth should not be read directly as credit improvement.

4. Financial Profile and Analysis

Fubon Life’s financial profile shows a strong insurance sales platform, a large investment portfolio, high net income, and substantial regulatory capital, while also being materially affected by foreign-currency assets, FX hedging, FX reserves and accounting/regulatory transition. When reading the 2025 financials, the decline in net income should not be taken on its own as evidence of business deterioration. It is necessary to separate the effects of insurance operations, investment income, market valuation, FX and reserves.

Total assets at end-2025 were NT$6,388.7bn, up 3.0% from NT$6,204.0bn at end-2024. Cash and cash equivalents were NT$390.7bn, up from NT$297.6bn at end-2024. Within investment assets, FVTPL financial assets were NT$1,475.5bn, FVOCI financial assets were NT$449.7bn and financial assets measured at amortised cost were NT$2,751.6bn. Financial assets account for most of total assets, and the company’s credit strength depends heavily not only on insurance sales but also on the quality, liquidity, mark-to-market volatility and accounting classification of investment assets.

On the liability side, insurance liabilities were NT$4,660.3bn at end-2025 and accounted for 73% of total assets. This was slightly lower than NT$4,683.8bn at end-2024, but insurance contract liabilities remain the core of the balance sheet. Insurance liabilities are affected by mortality, morbidity, surrender rates, guaranteed rates, expense ratios, discount rates, reinsurance, claims and policyholder behaviour. The audit report also treats the valuation of insurance liabilities as a key audit matter. Therefore, assessing Fubon Life’s repayment capacity requires looking at investment income on the asset side together with insurance contract assumptions on the liability side.

On capital, equity attributable to owners of the parent was NT$630.4bn at end-2025, while total equity was NT$637.2bn. In the Financial Analysis public disclosure, the parent-only net worth ratio was 9.80% in 2023, 11.39% in 2024 and 11.35% in 2025. The 2025 investor presentation shows Fubon Life’s RBC at 336.1% in 2023, 388.0% in 2024 and 434.0% in 2025, well above the regulatory minimum of 200%. As Fitch noted, the increase in RBC in 2025 reflected factors including capital debt issuance and the rebuilding of FX reserves, and should not be viewed as capital having accumulated organically from recurring earnings alone.

On earnings, written premium was NT$351.2bn in 2025 and retained earned premium was NT$345.4bn, both up modestly from 2024. The premium base was maintained. By contrast, total operating revenue declined from NT$664.4bn in 2024 to NT$569.5bn in 2025, and net operating income declined from NT$114.1bn to NT$62.7bn. Net income attributable to owners of the parent declined from NT$102.7bn to NT$62.7bn, while still reportedly ranking first in the industry. The 2025 decline in earnings was driven more by FX, market and reserve effects than by a collapse in premium income.

The investment-income breakdown illustrates this point well. Interest income in 2025 was NT$126.0bn and broadly stable. Gains and losses related to FVTPL financial assets and liabilities were positive NT$192.6bn, sharply higher than NT$70.2bn in 2024. Conversely, foreign exchange gains/losses on investments reversed from a positive NT$128.1bn in 2024 to a loss of NT$80.2bn in 2025, while the net change in reserve for foreign exchange valuation was negative NT$112.6bn in 2025. These figures show that, even when investment performance is strong, the Taiwan dollar, hedging and reserve treatment can materially move current-period earnings.

In the parent-only metrics in the Financial Analysis public disclosure, 2025 ROA was 1.16%, ROE was 10.07% and return on investment was 2.70%, all lower than in 2024. The investor presentation shows 2025 total investment return of 4.90% and 5.42% on a comparison basis excluding FX and hedging effects, but the calculation scope differs from the return on investment in the Financial Analysis PDF. Across the indicators, the appropriate interpretation is that Fubon Life has investment earnings power, but reported earnings are highly sensitive to FX, reserves and accounting classification.

From January 2026, IFRS 17 changes how net income should be interpreted. In the April 2026 monthly release, Fubon Life’s cumulative net income after tax for January-April 2026 was NT$46.06bn, while adjusted profit after including FVOCI equity disposal gains and losses was NT$94.50bn. The company explains that FVOCI equity disposal gains and losses are not recognised in current-period profit or loss, but are reflected directly in retained earnings and can be one source of dividends, making adjusted profit more comparable with performance before IFRS 17 adoption. This explanation is important, but investors should not treat adjusted profit as equivalent to cash earnings; equity markets, disposal gains, dividend capacity and capital regulation should be analysed separately.

The main financial indicators are summarised below. Amounts are generally rounded to NT$bn based on the consolidated financial statements. Insurance sales indicators and RBC are based on company presentation materials or parent-only disclosure, so the scope of presentation differs.

Insurance and capital metrics are as follows.

The financial conclusion is that Fubon Life has a strong premium base, investment earnings power and capital buffers as a major life insurer, while earnings and capital are materially affected by FX, hedging, market valuation and accounting transition. The decline in net income in 2025 is more an indication of the sensitivity of the Taiwanese life insurance model than of an abrupt deterioration in credit strength. From 2026 onward, current-period net income, adjusted profit, CSM, TIS, FX reserves and distributable earnings need to be followed separately.

5. Structural Considerations for Bondholders

For bond investors, the first task is to distinguish the roles of Fubon FHC, Fubon Life and Fubon Life Singapore Pte. Ltd. Fubon FHC is the parent company and is not the guarantor of the 2025 US dollar subordinated bond reviewed in this report. Fubon Life Singapore is a wholly owned subsidiary of Fubon Life and the issuer of that bond. Fubon Life is the insurer itself and the guarantor of the bond on a subordinated basis. Therefore, even if Fubon Life’s insurer financial strength is strong, the issuer, guarantee, subordination, regulatory capital treatment, redemption approval, call, interest-payment restrictions and loss-absorption features need to be checked separately for the individual bond.

In the consolidated financial statements at end-2025, bonds payable were NT$231.1bn, up from NT$153.6bn at end-2024. The notes state that the 5.45% bond due 2035 related to Fubon Life Singapore was issued on 10 September 2025 and had a carrying amount of approximately NT$20.3bn at end-2025, and that between 10 years and 10.25 years after issuance, Fubon Life Singapore may redeem the bond at par plus accrued interest if it obtains consent from Fubon Life’s supervisory authority and satisfies capital adequacy conditions. The Offering Circular states that the bond is an unsecured subordinated obligation of the issuer and that Fubon Life’s guarantee is also an unsecured subordinated obligation. The company release states that the bond was priced on 3 September 2025 as a US$650mn, 10.25-year subordinated bond with a three-month par call, with proceeds to be used to strengthen capital and improve the capital adequacy ratio.

In November 2025, Fitch affirmed Fubon Life’s Insurer Financial Strength Rating at A, Long-Term IDR at A-, National IFS Rating at AA+(twn), and National Long-Term Rating at AA(twn), and affirmed the US dollar subordinated dated capital bond issued by Fubon Life Singapore at BBB+. S&P also affirmed Fubon Life’s long-term issuer credit rating and insurer financial strength rating at A- in September 2025, and affirmed the subordinated notes issued by Fubon Life Singapore and guaranteed by Fubon Life at BBB+. Insurer financial strength ratings, issuer credit ratings, national-scale ratings and subordinated debt ratings each represent different risks.

Membership in the Fubon FHC group also needs to be treated carefully from a security-structure perspective. Being a core group subsidiary may support the likelihood of capital and liquidity support and market access. However, the credit strength of Fubon FHC or Taipei Fubon Bank does not automatically flow through to obligations of Fubon Life or Fubon Life Singapore. Before investing in a bond, investors should confirm the issuer, guarantor, guarantee ranking, claim ranking in liquidation, subordination to policyholder obligations, regulatory approval requirements, tax and regulatory calls, coupon deferral, and whether there is any write-down or conversion feature.

The insurance-company structure also matters because policyholder protection and regulatory protection are more likely to rank ahead of bondholders. Fubon Life’s insurance liabilities were NT$4,660.3bn at end-2025, far larger than bonds payable of NT$231.1bn. In normal conditions, this large policyholder base creates a stable liability structure, but under stress, policyholder protection, capital regulation and regulatory approvals may affect interest payment, redemption and calls on bonds. For subordinated debt in particular, even if the issuer is highly rated, principal and interest payment and redemption timing are not determined by issuer credit alone.

This report has confirmed the issuer, guarantor, subordinated status and main call terms of the 2025 US dollar subordinated bond, but has not exhaustively reviewed the trust deed, coupon deferral, regulatory call, tax call, all liquidation ranking definitions, or the presence or absence of write-down / conversion features. At the issuer level, Fubon Life can be viewed as a strong A-category life insurer, but for individual bonds, subordination, capital treatment, regulatory approval, non-call risk, tax and accounting treatment, and guarantee ranking must be checked separately.

6. Capital Structure, Liquidity and Funding

Fubon Life’s capital and liquidity appear strong in normal conditions. At end-2025, cash and cash equivalents were NT$390.7bn, equity attributable to owners of the parent was NT$630.4bn, the FX valuation reserve was NT$142.1bn and RBC was 434%. The Financial Analysis public disclosure shows a 2025 funding operation ratio of 100.46% and a net worth ratio of 11.35%. The April 2026 monthly release also states that the net worth ratio and TIS capital level were sound.

When assessing capital depth, it is important not to conflate legacy RBC, IFRS 17, TIS and CSM. The 434% RBC at end-2025 is a strong metric, well above the regulatory minimum of 200%. However, after the 1 January 2026 IFRS 17/TIS transition, insurance contract liabilities are measured based on current information and financial-asset classifications also change. Fubon Financial’s 2025Q4 investor presentation states that Fubon Life’s IFRS 17 basis net assets were approximately NT$534.5bn, CSM balance was NT$403.2bn, adjusted net assets including after-tax CSM were approximately NT$857.1bn, and the adjusted net worth ratio was 15.7%. This is useful for assessing economic value, but CSM is a source of future profit and is not immediately usable cash capital in full.

The TIS transition also changes the capital assessment. Company materials show a TIS target range of 125%-140% as of 1 January 2026, including transitional measures. RBC of 434% and TIS of 125%-140% are not the same metric. TIS captures a broader range of risks and changes confidence levels and risk factors, so headroom cannot be mechanically converted from the old RBC framework. Fubon Life indicates that it plans to address the transition using subordinated bond issuance, retained earnings, contributions from new business, foreign exchange reserves and asset reclassification, but this needs to be reconfirmed using audited or reviewed TIS figures from the first half of 2026 onward.

On liquidity, the increase in cash, the large investment portfolio and the Fubon FHC group’s capital-market access are supportive. The April 2026 release also states that Fubon Life maintains sufficient funds to prepare for market changes. However, a life insurer’s liquidity cannot be assessed from the cash balance alone. If surrenders, claims, FX hedging collateral/margin requirements, bond sales under unrealised losses, subordinated bond calls and capital regulation occur at the same time, the balance between liquidating investment assets and maintaining capital becomes an issue. This report has not confirmed quantitative figures for hedge ratios, hedging costs, derivative collateral, counterparty concentration or collateral liquidity.

On funding, Fubon Life has Taiwan dollar bonds, foreign-currency subordinated capital debt through Fubon Life Singapore and group market access. The increase in bonds payable in 2025 and Fitch/S&P’s subordinated debt ratings indicate access to capital markets. At the same time, capital debt increases issuer leverage and is affected by call expectations, coupon levels, regulatory approval and refinancing conditions. Even for a highly rated insurer, subordinated debt spreads and call expectations can move significantly in a rising-rate environment or market disruption.

Overall, Fubon Life currently has strong capital and liquidity buffers, but cash, legacy RBC, FX reserves, CSM, FVOCI disposal gains, adjusted profit and TIS have different meanings. For bond investors, it is important to continue monitoring RBC/TIS, FX reserves, cash, surrenders, unrealised losses on overseas fixed-income assets and the redemption conditions of subordinated debt.

7. Rating Agency View

Fubon Life’s ratings provide a useful external assessment that positions the company as a high-quality issuer within Asian life insurance credit. However, for insurers it is important not to confuse rating types and scales. Insurer financial strength ratings mainly indicate the ability to pay policyholder obligations, issuer credit ratings refer to general default risk on obligations, subordinated debt ratings incorporate security ranking, capital treatment and loss absorption, and national-scale ratings indicate relative position within Taiwan.

On 14 November 2025, Fitch affirmed Fubon Life’s Insurer Financial Strength Rating at A, Long-Term Issuer Default Rating at A-, National IFS Rating at AA+(twn) and National Long-Term Rating at AA(twn), and removed the Rating Watch Negative that had been in place since 15 May 2025. Fitch also affirmed the Taiwan dollar subordinated bonds at AA-(twn) and the US dollar subordinated dated capital bond issued by Fubon Life Singapore at BBB+. This makes clear that Fubon Life’s insurer financial strength is strong, but subordinated debt sits lower in the risk hierarchy than issuer credit.

Fitch’s positive view is based on Fubon Life’s scale, strong franchise, diversified distribution channels, geographic diversification, and earnings and capital profile. Fitch states that, as of 2024, the company ranked second in Taiwan, with a 15% share of total premium and a 13% share of new business premium. RBC rose from 388% at end-2024 to 405% at end-June 2025, and the capital assessment under Fitch Prism remained in the Very Strong category. This indicates that, even after the sharp Taiwan dollar appreciation in the first half of 2025, the company retained the capital buffer needed to support the rating in the near term.

At the same time, Fitch’s central constraint is FX risk. Fitch states that Fubon Life holds US dollar assets far in excess of US dollar liabilities and uses those assets to back Taiwan dollar obligations. Fitch views earnings and capital as supporting the current rating under its assumptions for the Taiwan dollar, but also expects that any meaningful reduction in foreign-currency exposure will take time. This is consistent with the central issue in this report. Fubon Life is a strong life insurer, but the rating ceiling is affected by FX, ALM, hedging and the capital regime.

On 30 October 2025, S&P affirmed Fubon Life’s long-term issuer credit rating and insurer financial strength rating at A-, and rated the subordinated notes issued by Fubon Life Singapore and guaranteed by Fubon Life at BBB+. Fubon Financial’s IR credit ratings page shows Fubon Life at S&P A- / Stable, Taiwan Ratings twAA+ / Stable, Moody’s A3 / Stable and Fitch A-/AA(twn) / Stable. Taiwan Ratings’ issuer page also displays Fubon Life at twAA+ / Stable and lists the 30 October 2025 affirmation in its research history. Moody’s and Taiwan Ratings are used in this report only to confirm rating levels, while the analytical basis is centred on Fitch and S&P, for which accessible public action text was reviewed.

The rating-agency views and this report’s analysis are broadly aligned. Fubon Life is a core issuer in Taiwan’s life insurance market, with A-category insurer financial strength and market access. At the same time, foreign-currency investments, Taiwan dollar movements, hedging costs, insurance liabilities and the IFRS 17/TIS transition constrain credit headroom and upside. When using ratings, IFS A, IDR A-, S&P A-, Moody’s A3, national-scale AA+(twn) and subordinated debt BBB+ should not be treated as the same thing.

8. Credit Positioning

Fubon Life is naturally positioned as a high-quality insurance credit: a top-tier issuer in Taiwan’s life insurance market, a core life insurance company within the Fubon FHC group and an internationally rated A-category credit. In 2025, net income ranked first in the industry, premium scale was among the highest in the industry, legacy RBC was 434% and the FX reserve was NT$142.1bn, indicating strength in both the operating franchise and capital.

Among Taiwanese peers, Fubon Life can be viewed as a leading life insurer alongside Cathay Life. Cathay Life is larger by asset size, while Fubon Life can point to 2025 net income, investment-return performance, legacy RBC, FX reserves and the Fubon FHC group’s cross-selling platform. Compared with Nan Shan Life, Fubon Life has relatively stronger external assessments in terms of Fitch IDR and subordinated debt ratings. However, because TIS, product-level CSM, ALM, hedging costs, subordinated bond terms and spreads have not been compared across peers on a common basis, this report does not conclude that Fubon Life is “the strongest” or “absolutely cheap”.

As an Asian life insurance credit, Fubon Life has strength in both insurance distribution and investment management, but reported earnings are highly affected by the Taiwan dollar, hedging, equity markets and accounting classification. This is not a bank-style credit centred on loans, deposits and NPLs. Insurance liabilities, CSM, TIS, FX reserves, overseas bonds and subordinated capital debt should be the focus.

By security class, senior issuer credit and subordinated debt should be clearly separated. At the issuer level, Fubon Life is a high-quality investment-grade insurer. For subordinated debt, in addition to issuer strength, subordination to policyholder obligations, regulatory capital treatment, supervisory approval, non-call risk, interest-payment restrictions, loss absorption and the SPV issuance structure matter. Fitch and S&P’s BBB+ rating on the Fubon Life Singapore subordinated bond illustrates this difference clearly.

No investment recommendation to buy, hold, sell or avoid is made because market prices, spreads, yields, OAS, CDS and comparisons with same-maturity Taiwanese life insurer Tier 2, bank Tier 2 and Asian insurance subordinated bonds have not been checked. Fubon Life is a leading candidate on fundamentals, but subordinated debt investment requires separate confirmation of price, terms, calls, liquidity, TIS transition and FX sensitivity.

9. Key Credit Strengths and Constraints

Fubon Life’s credit strengths are its leading franchise in Taiwan’s life insurance market, Fubon FHC’s distribution platform, industry-leading earnings, strong capital metrics, substantial FX reserve and A-category external ratings. In 2025, it reported net income of NT$62.65bn, ranking first in the industry, and first-year premium of NT$113.5bn and total premium of NT$367.4bn, ranking second in the industry. More than 18,000 agents, bancassurance with Taipei Fubon Bank and a 72.6% share from proprietary channels support customer acquisition and product control. On capital, end-2025 equity attributable to owners of the parent of NT$630.4bn, legacy RBC of 434% and FX reserve of NT$142.1bn are supportive, while the IFRS 17 transition CSM balance of NT$403.2bn is a source of future profits.

The first constraint is foreign-currency investments and Taiwan dollar movements. The 2025 foreign exchange loss of NT$80.2bn, the negative NT$112.6bn net change in FX valuation reserve and the FX reserve of NT$142.1bn showed that FX and reserves can materially affect earnings and capital. Fitch also identifies the fact that US dollar assets substantially exceed US dollar liabilities and are used to back Taiwan dollar obligations as a central constraint. The expansion of foreign-currency policy sales is an improvement direction, but it does not eliminate existing risk in the short term.

The second constraint is insurance liabilities and ALM. Insurance liabilities were NT$4,660.3bn at end-2025, accounting for 73% of total assets. After IFRS 17, insurance liabilities are measured based on current information, and the presentation of CSM, insurance finance expenses, OCI and financial-asset classification changes. Guaranteed rates on legacy contracts, participating policy dividend policy, surrender rates, asset-liability duration, claims ratios on health and accident products, reinsurance and scope for repricing have not been sufficiently confirmed in this report.

The third constraint is capital debt and security structure. Fubon Life’s issuer credit is strong, but the Fubon Life Singapore subordinated bond is rated BBB+ by Fitch/S&P, below the insurer financial strength and issuer credit ratings. Bond investors must check not only the issuer name but also subordination, guarantee ranking, regulatory approval, interest-payment suspension, redemption conditions and regulatory capital treatment.

The fourth constraint is interpretation of metrics amid disclosure and accounting transition. From 2026 onward, current-period net income, adjusted profit, FVOCI equity disposal gains and losses, CSM, TIS, legacy RBC and distributable earnings will coexist. The company’s adjusted profit is useful for performance comparison, but it is affected by equity markets and disposal gains, so it should not be equated with the insurer’s underlying repayment capacity. Investors need to reconfirm earnings sustainability and capital headroom through post-IFRS 17 half-year and full-year disclosures.

10. Downside Scenarios and Monitoring Triggers

The most realistic downside for Fubon Life is Taiwan dollar appreciation combined with worsening FX hedging costs. In a structure where US dollar assets substantially exceed US dollar liabilities, a rapid Taiwan dollar appreciation could simultaneously worsen FX valuation losses, hedging costs, additions to the FX valuation reserve, comprehensive income, RBC/TIS and rating-agency capital assessments. Because foreign exchange losses and FX reserve movements materially depressed earnings in 2025, FX remains the most important monitoring item.

The second downside is interest-rate, credit-spread and liquidity stress in overseas fixed-income assets. Overseas fixed-income assets are described as consisting mainly of North American investment-grade corporate bonds and financial bonds. Higher US rates, wider credit spreads, downgrades and lower liquidity would flow through to valuation losses, OCI, economic value, hedging collateral and capital regulation. Higher interest rates may be positive for reinvestment yield, but if valuation losses on existing bonds, surrender increases and TIS capital charges are large, the credit effect can be negative.

The third downside is stress in insurance liabilities, surrenders and claims. Fubon Life’s 13-month and 25-month persistency ratios are high, but if higher interest rates, competing product yields, FX movements and sales-quality issues overlap, higher surrenders could lead to asset sales, realisation of unrealised losses, liquidity needs and ALM deterioration. If this is combined with collateral and margin needs from FX hedging, liquidity headroom cannot be assessed from cash balances alone. Growth in health, accident and protection-type products may reduce dependence on interest-rate guarantees, but if medical inflation, claims payments, repricing or reinsurance deteriorate, underwriting profits could be pressured.

The fourth downside is deterioration in the post-IFRS 17/TIS capital outlook. Legacy RBC is strong at 434%, but TIS changes the scope and factors of risk capital measurement. The company indicates a TIS target of 125%-140%, but if interest rates, FX, equities, credit spreads, surrenders and claims all deteriorate at the same time, TIS headroom could narrow faster than expected. CSM is a source of future profit, but it is not the same as immediately loss-absorbing capital. The relationship among TIS, CSM, adjusted equity and dividend policy needs ongoing monitoring.

The fifth downside is risk specific to subordinated debt. Even if Fubon Life’s issuer credit remains intact, subordinated debt returns can be affected by regulatory approval, maintenance of capital treatment, redemption restrictions, non-call risk, interest-payment conditions and lower security ratings. Where an issuing vehicle is used, as with the Fubon Life Singapore bond, guarantee ranking, fund movement, governing law, tax and regulatory call provisions need to be checked.

Monitoring items are as follows.

11. Credit View and Monitoring Focus

Fubon Life’s current credit profile is that of a strong insurer supported by a top-tier Taiwanese life insurance franchise, Fubon FHC’s distribution platform, A-category ratings, legacy RBC of 434% and a substantial FX reserve. This is not a stage where near-term issuer credit stress is the central focus. Monthly self-reported results through April 2026 also do not show clear deterioration. However, IFRS 17 has only recently been introduced, adjusted profit includes FVOCI equity disposal gains and losses, and actual TIS, CSM roll-forward, distributable earnings and the sustainability of recurring yield remain pending for disclosure from the half-year period onward. The credit direction should be viewed as stable at present, and any improvement call should wait until TIS, CSM and post-hedging earnings are confirmed.

The supports are industry-leading 2025 net income, top-tier premium scale, more than 18,000 agents, bancassurance with Taipei Fubon Bank, a 72.6% proprietary-channel ratio, high persistency and the Fubon FHC group’s customer base. On capital, end-2025 equity attributable to owners of the parent of NT$630.4bn, FX reserve of NT$142.1bn and legacy RBC of 434% are important. The CSM balance of NT$403.2bn as of 1 January 2026 is a source of future profit, but not immediately loss-absorbing capital.

The main constraint is the combination of foreign-currency investments and long-duration insurance liabilities. The 2025 foreign exchange loss of NT$80.2bn and negative NT$112.6bn change in FX valuation reserve showed that FX, hedging and regulatory reserves can materially move earnings. Fitch also identifies the fact that US dollar assets substantially exceed US dollar liabilities as a central constraint. The expansion of foreign-currency policy sales and the increase in FX reserves are improvements, but they do not make the existing asset-liability structure harmless in the short term.

The IFRS 17/TIS transition complicates the analysis, but does not necessarily imply credit deterioration. The CSM balance of NT$403.2bn, adjusted net assets of NT$857.1bn and the TIS target of 125%-140% including transitional measures indicate preparation for the new regime. However, the TIS target is not comparable with legacy RBC of 434%, nor is it an actual result or a post-stress headroom measure. Investors need to distinguish among current-period net income, adjusted profit, CSM, TIS and distributable earnings. Reviewed financials and TIS disclosures from the first half of 2026 onward will be key inputs in firming up the credit view.

By security class, issuer credit and subordinated debt should be separated. Fubon Life’s issuer credit is strong and in the A category, but the Fubon Life Singapore subordinated bond is rated BBB+ by Fitch/S&P, with subordination, regulatory capital treatment, redemption approval, calls, interest-payment restrictions and guarantee ranking all relevant. Subordinated debt should not be treated as “safe because it is Fubon Life” based only on senior issuer credit; terms and TIS capital management should be explicitly reviewed.

The current credit view is to position Fubon Life as a strong major Taiwanese life insurance issuer, but one whose foreign-currency investments, ALM, IFRS 17/TIS transition and subordinated debt structure require ongoing monitoring. No investment recommendation is made because market spreads have not been checked. The fundamental focus is clear: more than sales power or earnings levels in isolation, investors should monitor whether those strengths can continue to absorb stress in FX, markets, insurance liabilities and regulatory capital.

12. Short Summary & Conclusion

Fubon Life Insurance is a top-tier Taiwanese life insurer under Fubon Financial Holding and a high-quality insurance issuer supported by industry-leading 2025 net income, top-tier premium scale, A-category ratings and legacy RBC of 434%. At the same time, its credit strength is highly affected by overseas fixed-income investments, Taiwan dollar movements, FX hedging, insurance liabilities and ALM, and the IFRS 17 / TIS transition. For subordinated debt, regulatory capital treatment, interest-payment and redemption restrictions, issuer and guarantee structure, and individual security terms need to be assessed separately.

13. Sources

Primary Company Sources

• Fubon Life Insurance Co., Ltd. and subsidiaries, Consolidated Financial Statements with Independent Auditors' Report, for the years ended December 31, 2025 and 2024, accessed 2026-05-15.
  https://www.fubon.com/life/cms/8546CB3645D1443CAB95A00CCE06550D/2026-04/202604171746498799730558.pdf
• Fubon Life Insurance Co., Ltd., Financial Analysis public disclosure, updated 2026-03, accessed 2026-05-15.
  https://www.fubon.com/life/cms/C3CA6C1952004902BC4CB3090B3EC34C/2026-03/202603160943228123334783.pdf
• Fubon Financial Holding Co., Ltd., Press Release for the 2025 Annual Investor Conference, 2026-03-16, accessed 2026-05-15.
  https://www.fubon.com/financialholdings/en/news/news_1260415_224470.htm
• Fubon Financial Holding Co., Ltd., 2025Q4 Investor Conference presentation, 2026-03-16, accessed through Fubon IR analyst meeting page and text mirror, 2026-05-15.
  https://fubon.irpro.co/en/conference.php
• Fubon Financial Holding Co., Ltd., April 2026 monthly earnings release, 2026-05-14, accessed 2026-05-15.
  https://www.fubon.com/financialholdings/news/news_1260515_808721.htm
• Fubon Financial Holding Co., Ltd., March 2026 monthly earnings release, 2026-04-15, accessed 2026-05-15.
  https://www.fubon.com/financialholdings/en/news/news_1260420_666808.htm
• Fubon Financial Holding Co., Ltd., Company Overview, accessed 2026-05-15.
  https://www.fubon.com/financialholdings/en/about/info.html
• Fubon Life Insurance Co., Ltd., 2024 Annual Report, printed 2025-02-28, accessed 2026-05-15.
  https://www.fubon.com/life/cms/AFD3AB19A27C45799C9A85764D814591/2025-09/202509221922322007249378.pdf
• Fubon Life Insurance Co., Ltd., preliminary Offering Circular for Fubon Life Singapore Pte. Ltd. Tier 2 Subordinated Dated Capital Bonds due 2035, dated 2025-09-01, accessed 2026-05-15.
  https://www.fubon.com/banking/document/Straight_bond_manage_securities/TW/WMBB25120011_XS3151416727.pdf
• Fubon Life Insurance Co., Ltd., news release on first overseas US$650mn subordinated bond issuance, 2025-09-04, accessed 2026-05-15.
  https://www.fubon.com/life/about-us/announcement/news/fu-bang-ren-shou-zou-xiang-guo-ji-wu-tai-hou-shi-zi-ben-jie-gou--shou-du-hai-wai-fa-zhai6-5-yi-mei-yuan

Rating Agency Sources

• Fitch Ratings, Fitch Affirms Fubon Life's IFS Rating at 'A', Removes Rating Watch Negative, 2025-11-14, accessed 2026-05-15 via public TradingView / Reuters mirror.
  https://www.tradingview.com/news/reuters.com%2C2025-11-14%3Anewsml_FIT1m2K9D%3A0-fitch-affirms-fubon-life-s-ifs-rating-at-a-removes-rating-watch-negative/
• S&P Global Ratings, Fubon Life Insurance And Fubon Financial Holding Ratings Affirmed On Stable Credit Profiles; Outlooks Stable, rating action dated 2025-10-30, accessed 2026-05-15.
  https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3469020
• Fubon Financial Holding Co., Ltd., Credit Ratings page, accessed 2026-05-15.
  https://fubon.irpro.co/en/creditratings.php
• Taiwan Ratings, Fubon Life Insurance issuer page, accessed 2026-05-15.
  https://www.taiwanratings.com/portal/front/memberProfile?ratingId=5631

Internal Working Data

• issuer_summary/issuers/fubon_life_insurance/data/fubon_life_insurance_key_metrics_20260515.json
• issuer_summary/issuers/fubon_life_insurance/working/fubon_life_insurance_20260515_writing_plan.md

Unverified / Pending

• 2026Q1 investor conference is listed for 2026-05-25 and was not yet available as of the report date, 2026-05-15.
• Full Moody's, Taiwan Ratings and Fitch/S&P subscriber research reports are not obtained. The report uses public rating levels and accessible public action text.
• 2025 US dollar Tier 2 bond issuer, guarantor, subordinated status and headline call terms were checked, but trust deed, coupon deferral, write-down, conversion, regulatory call, tax call, detailed guarantee ranking, governing law and liquidation priority definitions were not exhaustively reviewed.
• Product-level guarantee rates, participating policyholder dividend policy, health and accident claims ratios, reinsurance program, asset-liability duration gap, surrender sensitivity, detailed hedging cost and hedging collateral / margin liquidity disclosures are not fully available from reviewed public sources.
• Market prices, spreads, yields, OAS, CDS, liquidity and peer bond relative value are not checked. This report does not make a buy, hold or sell recommendation based on market levels.