Press Release - AUGUST 30, 2019

AM Best Affirms Credit Ratings of Macau Insurance Company Limited

 Paul Lam
Financial Analyst
+852 2827 3402

James Chan
Senior Financial Analyst
+852 2827 3418

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Macau Insurance Company Limited (MIC) (Macau). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect MIC’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.

MIC’s balance sheet strength continues to be supported by its risk-adjusted capitalization, which remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital and surplus strengthened significantly over the past two years following the sale of a life insurance subsidiary and a capital injection. However, the company is exposed to larger investment risk arising from significantly higher equity investments. Volatility in the capital markets may generate higher uncertainty for its capital and earnings.

MIC’s loss ratio improved in 2018, mainly from reserve releases from prior year claims due to prudent reserving and underwriting controls. This has offset the upward pressure on the net expense ratio from increases in net acquisition costs and management expenses. Going forward, AM Best expects that as MIC continues to manage down its unprofitable portfolio, while pursuing profitable growth through its bancassurance and direct channels, the company’s underwriting and operating results will remain positive.

MIC is a major insurer in Macau that underwrites non-life personal and commercial insurance products. Leveraging its long-established presence in its domestic market, the company remains selective in developing partnerships with a diversified distribution network, in particular local agencies, to maintain the quality of business. AM Best considers the company’s risk management capabilities to be aligned appropriately with its risk profile. In particular, the company actively monitors its investment risk through various risk limits and modeling, as well as stress testing.

Positive rating actions could occur if MIC successfully implements its business plan and achieves sustained improvement in its operating performance, while maintaining a robust level of risk-adjusted capitalization. Negative rating actions could occur if MIC’s operating performance experiences a material deterioration, due to either unfavorable investment results or a significant decline in its 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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AMB# Company Name
084138 Macau Insurance Company Limited