AM Best


AM Best Affirms Credit Ratings of China Taiping Insurance (HK) Company Limited


CONTACTS:

James Chan
Senior Financial Analyst
+852 2827 3418
james.chan@ambest.com

Christie Lee
Director, Analytics
+852 2827 3413
christie.lee@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

FOR IMMEDIATE RELEASE

HONG KONG - DECEMBER 13, 2018 02:00 PM (EST)
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 profits, prudent reserving practice and the financial flexibility of the intermediate parent holding company, China Taiping Insurance Holdings Company Limited (CTIH), as a publicly listed company.

The company has demonstrated a track record of positive operating results, mainly underpinned by favorable investment income sourced from a stable stream of interest, rental and dividend income. Since 2012, the increasing proportion of inward reinsurance, mainly motor business, has contributed to the stable overall underwriting results, despite this margin remaining low. Over the short to intermediate term, AM Best expects investment performance to remain the key driver of the overall operating results with underwriting profitability maintained at a stable, yet low level.

CTPI(HK) benefits from its long operating history, brand recognition and business relationships established at the group level, in particular with Sino-based enterprises in Hong Kong. The company is one of the top players in key business lines that include motor, property damage, statutory general liability and marine insurance; overall, it ranked third largest in 2017 based on gross premiums written.

Offsetting rating factors include investment risks associated with the company’s relatively high proportion of investment properties, non-investment grade bonds and unlisted funds, as well as the continued soft pricing environment in Hong Kong’s highly competitive non-life insurance market.

Positive rating actions are unlikely in the near term. Negative rating actions could occur if there is a material deterioration in the company’s operating results or if there is a material decline in 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 rating agency and information provider with a unique focus on the insurance industry.


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