East Asia life insurers raise billions from capital markets in 2023

Insurance underwriters in Asia significantly grew the amount they raised from capital markets in 2023, with life insurers in East Asia at the forefront, an S&P Global Market Intelligence analysis shows.

The number of capital raises by underwriters decreased slightly in 2023 to 84 from 86 in 2022, but the total capital raised climbed to $20.76 billion from $16.71 billion. At the same time, number of capital raises by Asian insurtech companies declined to 45 from 70, while the amount raised dropped to $800 million from $1 billion in 2022.

Life insurers in East Asia were particularly active in the capital markets across the year, according to the Market Intelligence analysis.

Taiwan to the fore

Taiwan-domiciled Cathay Life Insurance Co. Ltd. led the field by raising a combined $2.11 billion, divided into $964.4 million from debt markets and a $1.14 billion capital infusion from parent company Cathay Financial Holding Co. Ltd.

Three life insurers in Taiwan raised new capital through new right issuances, totaling about $3.9 billion, in 2023. At the same time, several life insurers raised Tier 2 subordinated bonds, which qualify as regulatory capital, amounting to $105 billion during 2023.

"This followed the regulator's new governance rule to include such bonds as part of qualified regulatory capital under both the current regulatory capital regime and the new ICS (Insurance Capital Standard) regime to come in 2026," S&P Global Ratings analyst Serene Hsieh wrote in an email.

Taiwan insurers are facing tougher capital requirements as in 2026. Taiwan will simultaneously adopt IFRS 17 and begin implementing the so-called "New Generation Insurance Solvency Regime." At that time, all insurers will be required to measure assets and liabilities at fair value.

Other Taiwan insurers that raised capital according to Market Intelligence's analysis include Fubon Insurance Co. Ltd., Hotai Insurance Co. Ltd., Mercuries Life Insurance Co. Ltd. and Mercuries & Associates Holding Ltd.

In Hong Kong, China Life Insurance (Overseas) Co. Ltd. and China Taiping Insurance Holdings Co. Ltd. both issued $2 billion of subordinated debt in 2023.

In Japan, Nippon Wealth Life Insurance Co. Ltd. received a $1.72 billion injection from parent Nippon Life Insurance Co., while New China Life Insurance Co. Ltd. raised $1.38 billion from the debt markets.

Distribution-focused Bolttech Digital Brokerage Singapore Pte. Ltd., which is reportedly considering going public, was the biggest fundraiser among Asian insurtechs in 2023.

Investors also bet heavily on Indian insurtechs, as Niva Bupa Health Insurance Co. Ltd., Policybazaar Insurance Brokers Private Ltd. and Girnar Insurance Brokers Private Ltd. closed financing rounds during the year.