AM Greatest Affirms Credit score Rankings of Hong Leong Insurance coverage (Asia) Restricted

HONG KONG, January 07, 2022–(BUSINESS WIRE)–AM Greatest has affirmed the Monetary Energy Ranking of A- (Glorious) and the Lengthy-Time period Issuer Credit score Ranking of “a-” (Glorious) of Hong Leong Insurance coverage (Asia) Restricted (HLIA) (Hong Kong). The outlook of those Credit score Rankings (scores) is steady.

The scores replicate HLIA’s stability sheet energy, which AM Greatest assesses as very robust, in addition to its robust working efficiency, restricted enterprise profile and acceptable enterprise threat administration.

HLIA’s stability sheet energy is underpinned by its risk-adjusted capitalisation on the strongest stage, as measured by Greatest’s Capital Adequacy Ratio (BCAR). The evaluation additionally displays HLIA’s low underwriting leverage and a reinsurance programme of excellent high quality. Offsetting elements embrace the corporate’s modest capital dimension, some focus threat in an actual property and reasonable reinsurance dependency.

HLIA’s robust working efficiency is evidenced by optimistic underwriting outcomes, with a five-year common web mixed ratio of roughly 80% and a five-year common return on fairness of 8.7%. The underwriting profitability was affected negatively by the COVID-19 pandemic as a result of much less journey enterprise, however the web mixed ratio nonetheless outperformed the market. Acquisition bills might enhance sooner or later as the corporate expands its distribution channels, diluting the proportion of direct channel, however the firm expects its general underwriting revenue to extend because the insurance coverage portfolio grows. The corporate’s unrealized losses from investments diminished the general web revenue in recent times.

HLIA maintains a small market presence in Hong Kong’s normal insurance coverage market. Whereas the corporate focuses on private strains, it’s increasing its business strains enterprise to offset the drop in premium from journey insurance coverage amid COVID-19. In regard to distribution, HLIA continues to utilise its on-line platform and direct channel to supply new private strains enterprise and cross-sell with low acquisition expense. The corporate additionally plans to broaden its distribution channels by cooperating with some intermediaries.

The corporate’s threat profile exhibits reasonable enterprise focus threat provided that it’s a native insurer in a small market and has some asset focus. However, AM Greatest considers the corporate’s threat administration capabilities to be aligned appropriately with its threat profile, supported primarily by the corporate’s prudent underwriting pointers and strong reinsurance programme.

Adverse score actions might happen if there may be vital deterioration in HLIA’s working efficiency; for instance, as a result of opposed funding losses or a diminished underwriting margin. Adverse score actions additionally might happen if there may be vital deterioration within the firm’s risk-adjusted capitalisation. A deterioration within the credit score profile of HLIA’s father or mother firms, Hong Leong Monetary Group Berhad and Hong Leong Firm (Malaysia) Berhad additionally might impose a unfavourable influence on HLIA’s scores.

Rankings are communicated to rated entities previous to publication. Until acknowledged in any other case, the scores weren’t amended subsequent to that communication.

This press launch pertains to Credit score Rankings which have been revealed on AM Greatest’s web site. For all score data referring to the discharge and pertinent disclosures, together with particulars of the workplace chargeable for issuing every of the person scores referenced on this launch, please see AM Greatest’s Current Ranking Exercise net web page. For extra data concerning the use and limitations of Credit score Ranking opinions, please view Information to Greatest’s Credit score Rankings. For data on the right use of Greatest’s Credit score Rankings, Greatest’s Preliminary Credit score Assessments and AM Greatest press releases, please view Information to Correct Use of Greatest’s Rankings & Assessments.

AM Greatest is a worldwide credit standing company, information writer and information analytics supplier specialising within the insurance coverage business. Headquartered in the US, the corporate does enterprise in over 100 international locations with regional places of work in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico Metropolis. For extra data, go to www.ambest.com.

Copyright © 2022 by A.M. Greatest Ranking Providers, Inc. and/or its associates. ALL RIGHTS RESERVED.

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