Well Link Life Insurance is positioning itself for significant growth, aiming to achieve double-digit investment yields in 2024, according to AM Best’s latest assessment. The company’s financial outlook for the medium term remains positive, with AM Best forecasting that its risk-adjusted capitalisation will remain at the strongest level through 2025.
However, challenges could arise in 2026, as anticipated capital requirements for future growth may place downward pressure on the insurer’s financial standing. Despite this, Well Link Life’s balance sheet is expected to remain robust, underpinned by solid regulatory solvency and a controlled approach to asset risk.
The company’s investment portfolio, predominantly consisting of publicly listed bonds and stocks, will continue to follow its diversification strategy. Liquidity levels are expected to remain stable as the insurer navigates market fluctuations.
Although Well Link Life reported a -13.8% return on equity (ROE) for 2023, the insurer is focused on improving its underwriting profitability in the coming year. The previous year’s results were impacted by losses from onerous insurance contracts under the HKFRS17 standard. Despite this, the company anticipates improving operating expense efficiency over the intermediate term.
In terms of investment performance, Well Link Life saw significant gains in 2023, driven by capital gains and increased income. The company is optimistic that this momentum will continue into 2024, with plans to achieve a double-digit investment yield.
However, the company’s market presence remains relatively modest, holding a 1.6% share of Hong Kong’s individual life new business market as of the first three quarters of 2024. Well Link Life ranks 12th among local insurers, but the company plans to expand its long-term participating business and grow its non-participating lines in the years ahead.
AM Best also highlighted the insurer’s effective enterprise risk management, which aligns with its risk profile. Well Link Life continues to meet regulatory requirements through its annual Own Risk and Solvency Assessment, ensuring compliance across its operations.
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