KUALA LUMPUR, Oct 15 (Bernama) – A.M. Best has affirmed the financial strength rating of A (excellent) and the long-term issuer credit rating of ‘a’ of Luen Fung Hang Insurance Co Ltd (LFH) Macau and the outlook is stable.
The global rating agency in a statement said it has also removed the company from under review with negative implications.
The ratings reflect LFH’s balance sheet strength, which A.M. Best said is very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
According to the statement, LFH’s balance sheet strength is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR).
This result mainly reflects its low underwriting leverage, prudent reinsurance program and conservative investment allocation.
Meanwhile, on March 29, A.M. Best placed LFH’s ratings under review with negative implications because the uncertainty whether the company could comply with local regulations regarding technical reserves.
Due primarily to the open claims in relation to Typhoon Hato, LFH’s technical reserves (including the ceded portion) were elevated as of Dec 31, 2017.
Based on Macau regulations, the company would be required to pledge significantly more admitted assets to the Monetary Authority of Macao (AMCM) by April 2018 and the removal of the under review status follows AMCM’s recent formal approval to waive some of these requirements.
LFH continues to maintain a market leading position in Macau – capturing more than 25 per cent of total domestic market share while demonstrating stable operating trends.
The company’s major products are fire, medical, other accidents with the remainder from motor, employee compensation and marine. More details at www.ambest.com
-- BERNAMA
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