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AM Best Affirms Credit Ratings of Hong Leong Insurance (Asia) Limited

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HONG KONG–()–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Hong Leong Insurance (Asia) Limited (HLIA) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect HLIA’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

HLIA’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment also reflects HLIA’s low underwriting leverage and a reinsurance programme of good quality. Offsetting factors include the company’s modest capital size, some concentration risk in a real estate and moderate reinsurance dependency.

HLIA’s strong operating performance is evidenced by positive underwriting results, with a five-year average net combined ratio of approximately 80% and a five-year average return on equity of 8.7%. The underwriting profitability was affected negatively by the COVID-19 pandemic due to less travel business, but the net combined ratio still outperformed the market. Acquisition expenses may increase in the future as the company expands its distribution channels, diluting the proportion of direct channel, but the company expects its overall underwriting profit to increase as the insurance portfolio grows. The company’s unrealized losses from investments reduced the overall net profit in recent years.

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HLIA maintains a small market presence in Hong Kong’s general insurance market. While the company focuses on personal lines, it is expanding its commercial lines business to offset the drop in premium from travel insurance amid COVID-19. In regard to distribution, HLIA continues to utilise its online platform and direct channel to source new personal lines business and cross-sell with low acquisition expense. The company also plans to expand its distribution channels by cooperating with some intermediaries.

The company’s risk profile shows moderate business concentration risk given that it is a local insurer in a small market and has some asset concentration. Nevertheless, AM Best considers the company’s risk management capabilities to be aligned appropriately with its risk profile, supported mainly by the company’s prudent underwriting guidelines and robust reinsurance programme.

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Negative rating actions could occur if there is significant deterioration in HLIA’s operating performance; for example, due to adverse investment losses or a diminished underwriting margin. Negative rating actions also could occur if there is significant deterioration in the company’s risk-adjusted capitalisation. A deterioration in the credit profile of HLIA’s parent companies, Hong Leong Financial Group Berhad and Hong Leong Company (Malaysia) Berhad also may impose a negative impact on HLIA’s ratings.

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.

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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. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Continue Reading News Story. Published by New Delhi Central Press Syndicate. For feedback write to Amnon Jakony, Founding Editor/Publisher – amnon [at] thedailyreformer.com. Thanks for reading.

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AM Best Affirms Credit Ratings of Hong Leong Insurance (Asia) Limited

Read, enjoy and share the latest news features on Canada Morning Post

Read, enjoy and share the latest news in India on New Delhi Central Press Syndicate.

AM Best Logo

HONG KONG–()–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Hong Leong Insurance (Asia) Limited (HLIA) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect HLIA’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

HLIA’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment also reflects HLIA’s low underwriting leverage and a reinsurance programme of good quality. Offsetting factors include the company’s modest capital size, some concentration risk in a real estate and moderate reinsurance dependency.

HLIA’s strong operating performance is evidenced by positive underwriting results, with a five-year average net combined ratio of approximately 80% and a five-year average return on equity of 8.7%. The underwriting profitability was affected negatively by the COVID-19 pandemic due to less travel business, but the net combined ratio still outperformed the market. Acquisition expenses may increase in the future as the company expands its distribution channels, diluting the proportion of direct channel, but the company expects its overall underwriting profit to increase as the insurance portfolio grows. The company’s unrealized losses from investments reduced the overall net profit in recent years.

Other News:   ASX rises to end first 2022 trading week

HLIA maintains a small market presence in Hong Kong’s general insurance market. While the company focuses on personal lines, it is expanding its commercial lines business to offset the drop in premium from travel insurance amid COVID-19. In regard to distribution, HLIA continues to utilise its online platform and direct channel to source new personal lines business and cross-sell with low acquisition expense. The company also plans to expand its distribution channels by cooperating with some intermediaries.

The company’s risk profile shows moderate business concentration risk given that it is a local insurer in a small market and has some asset concentration. Nevertheless, AM Best considers the company’s risk management capabilities to be aligned appropriately with its risk profile, supported mainly by the company’s prudent underwriting guidelines and robust reinsurance programme.

Other News:   Milder Omicron an “evolutionary mistake”;

Negative rating actions could occur if there is significant deterioration in HLIA’s operating performance; for example, due to adverse investment losses or a diminished underwriting margin. Negative rating actions also could occur if there is significant deterioration in the company’s risk-adjusted capitalisation. A deterioration in the credit profile of HLIA’s parent companies, Hong Leong Financial Group Berhad and Hong Leong Company (Malaysia) Berhad also may impose a negative impact on HLIA’s ratings.

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.

Other News:   Snow Covers British Columbia Roads After ‘Intense’ Winter Storm

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. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source link

The content is by Business Wire. Headlines of Today Media is not responsible for the content provided or any links related to this content. Headlines of Today Media is not responsible for the correctness, topicality or the quality of the content.

Continue Reading News Story. Published by New Delhi Central Press Syndicate. For feedback write to Amnon Jakony, Founding Editor/Publisher – amnon [at] thedailyreformer.com. Thanks for reading.

Continue Reading News Story. Published by Canada Central Press Syndicate. For feedback write to Amnon Jakony, Founding Editor/Publisher - amnon [at] thedailyreformer.com. Thanks for reading.

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