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Best’s News & Research Service - July 27, 2021 09:06 AM (EDT)

AM Best Comments on Credit Ratings of Zhongyuan Agricultural Insurance Co., Ltd. Following Severe Rainfall in Henan Province

  • July 27, 2021 09:06 AM (EDT)

Hong Kong //BestWire// - AM Best has commented that the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Zhongyuan Agricultural Insurance Co., Ltd. (ZYIC) (China) remain unchanged following the heavy rains that have flooded the province of Henan since 19 July 2021. This extreme weather disaster, which has affected the central and northern part of the province most severely, has broken meteorological records that stood for the past few decades.

ZYIC is a professional agricultural insurer incorporated in Henan province. Its underwriting book contains over 60% crop and livestock insurance, while other lines of business include motor, property, liability, accident and health. Based on the latest information provided by ZYIC, AM Best sees no imminent pressure to the company’s credit fundamentals. However, it is still too early to measure the full extent of the damages and losses derived from this weather-related event as the rescue work is still underway and claims reporting will take time. AM Best does have concern regarding the uncertainty over how ZYIC’s total incurred claims may develop, especially relating to its agricultural, motor and property lines of business, given the company’s concentrated net exposure to natural catastrophe risk in Henan.

AM Best will continue to monitor the development of the event and hold discussions with ZYIC’s management to assess the subsequent implications for its balance sheet strength and operating performance.

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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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