Asia Pacific Credit Biweekly: What we published over the last 2 weeks

研报英文原文证据摘录

Asia Pacific Credit Biweekly: What we published over the last 2 weeks

Non-Banks Financial Institutions - Taiwan

Lefu Li +852 3508 2142

Taiwan lifers: expensive valuation with uncertainties over

profitability and supply

(Published 11 May 2026)

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

Along with the general market rally, Taiwan lifers’ credit spread saw 30bp tightening

since end-March, with an all-time tight level at 134bp. This is also 25bp tighter than the

pre-West Asia conflicts. However, we see negative implications on Taiwan 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, with higher margins

mitigating some negative effects. Please see our strategy report: Asia Pacific Credit

Strategy: Credit Implication Assessment of West Asia Conflicts. We also see higher

supply risk for Taiwan lifers, given the weak solvency position reported 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 CATLF

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

…but we still see negative implication on Taiwan lifers…

Based on our economist team’s view, due to the West Asia conflicts, Taiwan GDP growth

would slow down to 4.0% and inflation would increase to 2.4% in an escalation scenario

from 8.0% and 1.6%, respectively. For the life insurers, we expect the impact to be more

significant than other FIs, as we see negatives not only from the premium growth side,