HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Wing Lung Insurance Company Limited (WLI) (Hong Kong). The outlook for each rating remains stable.
The rating affirmations reflect WLI’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), favorable operating results and adequate reinsurance protection.
WLI’s capital and surplus strengthened to HKD 945 million (USD 122 million) at year-end 2015, representing a year-on-year increase of 13.5% and five-year compound average growth of 16.5% per annum. This capital improvement is due to full profit retention over the past few years. Despite intense competition in Hong Kong’s employees’ compensation and motor lines segments, which are WLI’s key business lines, the company has maintained pricing discipline and delivered positive and improving underwriting results since 2010. WLI also has achieved stable investment income from its diversified investment portfolio.
Offsetting rating factors include WLI’s exposure to credit risks from relatively risky non-rated bonds and the competitive operating environment in Hong Kong’s non-life market.
Positive rating actions may occur if WLI demonstrates substantial improvement in its business profile, while maintaining consistently strong risk-adjusted capitalization and stable underwriting and investment performance. Negative rating actions could occur if the company’s risk-adjusted capitalization significantly deteriorates, for example, due to adverse 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 rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.
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