Chow Tai Fook Life Insurance Company Limited (CTF Life) recorded stronger insurance and investment results in the financial year ending June 2025, which helped support a higher return on equity and stable new business value margins, according to Fitch Ratings.
Fitch affirmed CTF Life’s Insurer Financial Strength (IFS) rating at ‘A-’ (Strong) and Long-Term Issuer Default Rating (IDR) at ‘BBB+’, both with a Stable Outlook. The ratings agency said the affirmation reflected the Hong Kong-based insurer’s solid capitalisation, sound earnings and prudent risk management, balanced against its moderate business profile.
CTF Life’s return on equity rose to 6.9% in FY25 from 6.1% a year earlier, supported by “stronger insurance service results and investment returns,” Fitch said. The company’s strategy of focusing on value-driven, participating products has helped improve profitability, even as annualised premium equivalent (APE) growth slowed due to a high base following the China–Hong Kong border reopening.
Capitalisation remained robust, with Fitch’s Prism Model score above the “Very Strong” level at end-June 2025, underpinned by steady earnings and a higher contractual service margin. The insurer’s Hong Kong risk-based capital ratio fell slightly to 279% from 289% the prior year, reflecting ongoing business expansion. Fitch expects capital adequacy to “stay robust, underpinned by prudent risk management and continued profit generation.”
On the investment side, Fitch noted a rise in the insurer’s risky-asset ratio due to greater allocations to funds and alternative investments intended to support growth in participating business. However, the ratio “compares well” against peers in the same rating category. The agency also highlighted CTF Life’s “active matching adjustment strategy,” which uses investment-grade bonds of varying tenors to mitigate duration mismatch and reduce interest-rate risk.
Fitch assessed the company profile as “Moderate,” citing its smaller operating scale and less diversified sales channels relative to larger Hong Kong peers. CTF Life held a 3% market share by APE at end-2024, ranking 11th locally.
A wholly owned subsidiary of CTF Services Limited under the Chow Tai Fook Group, CTF Life has benefited from its parent’s brand strength and capital support since its acquisition and rebranding. Fitch added that closer collaboration with the group and expansion as a wealth management platform “support business expansion and product distribution,” though these developments do not materially affect the rating.
