SUN HUNG KAI PROPERTIES INSURANCE FINANCIAL STRENGTH RATED EXCELLENT

KUALA LUMPUR, March 22 (Bernama) -- Global credit rating agency, AM Best has affirmed Hong Kong’s Sun Hung Kai Properties Insurance Limited (SHKPI) financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent).

The outlook of these credit ratings (ratings) is stable, reflecting SHKPI’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

SHKPI’s very strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio.

The company’s higher-risk financial assets, including unlisted investments and non-investment-grade bonds, exposed its risk-adjusted capitalisation to considerable market and credit risks.

Nonetheless, the company has de-risked the majority of its bond exposure to mainland China’s real estate sector in fiscal year 2023, with its bond portfolio demonstrating an improvement in the credit quality with higher diversification level.

According to AM Best in a statement, SHKPI has consistently delivered a strong operating performance over the past few years, in which its net profit in fiscal year 2023 was a combined result of a recovery in investment performance and stable underwriting profit.

SHKPI continues to benefit from its parent company’s support, both in distribution channels with minimal gross acquisition expenses as well as in access to better quality group business, leading to its favourable underwriting results.

A wholly owned subsidiary of Sun Hung Kai Properties Limited, one of the largest property development and investment conglomerates in Hong Kong, SHKPI benefits from its parental network to write a major part of its business from associated and subsidiary companies.

The company continues to operate in a low acquisition cost business model while seeking new business opportunities within the market, and maintains a small albeit profitable presence in Hong Kong’s general insurance market, focusing on employees’ compensation insurance on a net premiums written basis.

-- BERNAMA