Cathay Life's Net Worth Hits 4-year High of US$4.33 Billion

Taipei, Oct.16, 2012 (CENS)--The recovery of Taiwan's stock market in September helped life insurers boost net worth significantly, as Cathay Life Insurance's rebounded NT$20 billion (US$666.67 million) in the third quarter, totaling over NT$130 billion (US$4.33 billion) by the end of third quarter, a new 4-year high.

Higher net worth helps life insurers cope with changes in capital market and ease capital-raising pressure, as well as enhancing stock price. With the upcoming IFRS (International Financial Reporting Standards) in January 2013, life insurers aim to book appreciating value of real estate amid their net worth.

A representative of Cathay says net worth and Taiwan's stock market are closely related, as the growth of net worth in the third quarter was mainly due to a stock market rally in September. With strong performance of stock market in January and February this year, Cathay's net worth once stood NT$130 billion (US$4.33 billion), but shrinking to NT$114.3 billion (US$3.81 billion) in the end of June to almost equal that at the end of last year.

Due to increasing unrealized profits of financial assets, Cathay saw net worth in the third quarter grow more than NT$20 billion (US$666.67 million), said a representative of the insurer.

With 2% appreciation of Taiwan Dollar in September, many life insurers suffered losses in profits. However, a representative of Cathay says the firm's sufficient foreign exchange reserve eased the impact of appreciating Taiwan Dollars.

In addition, Cathay's cumulative consolidated FYPE (first year premium equivalent) by September amounted to NT$69.47 billion (US$2.32 billion), firmly leading the industry.