HONG KONG--(BUSINESS WIRE)--A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of SHC Insurance Pte. Ltd. (SHC Insurance) (Singapore). The outlook for both ratings is stable.
The ratings reflect SHC Insurance's adequate risk-based capitalization, favorable operating performance and sound risk management practices.
SHC Insurance’s capital and surplus has been growing over the past five years due to its consistently favorable results from both underwriting and investments. With its forecasted business growth, the company's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is expected to remain adequate in the near term.
SHC Insurance has a good track record of favorable operating results, with its overall five-year average combined ratio remaining below 90%. This can be attributed to the company’s initiatives to enhance underwriting profitability, such as pricing adjustments, monitoring underwriting performance and improving employee productivity.
SHC Insurance's conservative investment strategy continues to generate stable income. Starting from 2013, the company’s investment framework was further enhanced through stringent guidelines for debt securities.
Offsetting rating factors include the potential pressure on SHC Insurance's risk-adjusted capitalization from future dividend payouts and its possible future acquisition and business expansion activities. Another offsetting factor is the challenge the company faces to further enhance its profile in the competitive Singapore non-life insurance market.
SHC Insurance is well positioned at its current rating level. Negative rating actions could occur if there is deterioration in the company’s underwriting performance or significant erosion in its capitalization level.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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