HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of China BOCOM Insurance Company Limited (CBIC) (Hong Kong). The outlook of these Credit Ratings (ratings) remains stable.
The rating affirmations reflect CBIC’s excellent risk-adjusted capitalization and the strong ties it has had with its banking parent, Bank of Communications Co., Ltd. (BOCOM), since its inception in 2000.
CBIC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains strong and supportive of its current ratings, and is attributed in part to the company’s low underwriting leverage. CBIC plays a strategic role within BOCOM as the group’s sole general insurance operation, and receives support from its parent in the form of business referrals, access to a distribution network, risk management, information technology and capital support.
Offsetting rating factors include CBIC’s high operating expense ratio in light of a small premium base. Competitive conditions in Hong Kong’s non-life insurance market could challenge CBIC’s underwriting profitability and business development.
Positive rating actions could occur if CBIC demonstrates significant improvement in its market position while maintaining a stable and profitable operating performance. Negative rating actions could occur if there is a material decline in CBIC’s risk-adjusted capitalization due to deterioration in its operating performance or if the support from BOCOM is weakened notably.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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