Non-Banks Financial Institutions - Taiwan: Taiwan lifers: expensive valuation with uncertainties over profitability and supply

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Non-Banks Financial Institutions - Taiwan: Taiwan lifers: expensive valuation with uncertainties over profitability and supply

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Non-Banks Financial Institutions - Taiwan

Taiwan lifers: expensive valuation with

uncertainties over profitability and supply

Rating Change - Credit

Average spread at 134bp now, tighter than pre-war level… 11 May 2026

Along with the general market rally, Taiwan lifers’ credit spread saw 30bp tightening Global Emerging Markets | Corporate

since end-March, with an all-time tight level at 134bp (Exhibit 1 & 2). This is also 25bp Credit

tighter than the pre-West Asia conflicts. However, we see negative implications on Asia | Taiwan

Non-bank Financial InstitutionsTaiwan lifers from the conflicts, due to higher hedging cost and uncertainties over the

investment return. The impact could be more severe than that for commercial banks, Lefu Li, CFA

with higher margins mitigating some negative effects. Please see our strategy report: Research Analyst

Merrill Lynch (Hong Kong)

Asia Pacific Credit Strategy: Credit Implication Assessment of West Asia Conflicts. We +852 3508 2142

also see higher supply risk for Taiwan lifers, given the weak solvency position reported lefu.li@bofa.com

at end’25, with SHIKON not being compliant with the regulatory requirements. Thus, we

downgrade NSINTW’34/’41 to MW from OW, given their less-attractive RV currently. We

are still MW SHIKON’35, due to its weaker solvency position despite wider spread. The Acronyms

CATLF complex looks expensive. We add coverage on the new CATLIF 5.5 2041 at UW.

AC: Amortized cost

…but we still see negative implication on Taiwan lifers…

CATLIF: Cathay Life Insurance Co LtdBased on our economist team’s view, due to the West Asia conflicts, Taiwan GDP growth