HONG KONG, Dec 16 (Bernama-BUSINESS WIRE) -- AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of China Taiping Insurance (HK) Company Limited [CTPI(HK)] (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect CTPI(HK)’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
CTPI(HK) continues to maintain robust risk-adjusted capitalization, supported by an organic accumulation of retained earnings, an improving quality of investment assets, prudent reserving practices and comprehensive reinsurance programs.
CTPI(HK) has demonstrated a track record of positive underwriting results over the past five years, despite thin profit margins. Investment assets continue to provide the company a stream of stable and favorable returns through interest, rental and dividend income. Over the short to intermediate term, AM Best expects the company’s operating performance to remain highly dependent on its investment performance, while underwriting profitability can be maintained at a stable, yet low level.
CTPI(HK) benefits from its long operating history, brand recognition and business relationships with clients, in particular Sino-based enterprises and distribution partners in Hong Kong. The company ranked third in Hong Kong’s non-life insurance market based on gross premium written in 2018, and remained a leading player in key business lines including motor, property damage, statutory general liability and marine insurance. While agents and brokers are the major source of premium revenue, the company aims to diversify its distribution network by developing a direct sales team and reinforcing its bancassurance channel.
Offsetting rating factors include investment concentration risks associated with unlisted funds and investment properties, as well as the prolonged intense market competition.
Positive rating actions are unlikely in the near term. Negative rating actions could occur if there is a trend of material deterioration in the company’s operating results, or if there is a material decline in CTPI(HK)’s risk-adjusted capitalization.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Contact
June Wang
Associate Financial Analyst
+852 2827 3416
june.wang@ambest.com
James Chan
Senior Financial Analyst
+852 2827 3418
james.chan@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
Source : AM Best
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