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A.M. Best Affirms Credit Ratings of China Taiping Insurance (HK) Company LimitedA.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" of China Taiping Insurance (HK) Company Limited (CTPI[HK]) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable. The ratings reflect CTPI[HK]'s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. CTPI[HK] is well-capitalized and has little capital volatility. Its risk-adjusted capitalization level, as measured by Best's Capital Adequacy Ratio (BCAR), remains solid and supportive of its historical and anticipated business growth. The company maintains a profitable underwriting book in Hong Kong's highly competitive non-life insurance market, though underwriting profits remain thin. Strong investment income has been the major contributor to net profits over the past five years. CTPI[HK] has a strong market presence as one of the top five non-life insurers in Hong Kong, especially in marine, motor and property lines of business. These positive rating factors are offset partially by the unfavorable underwriting results in CTPI[HK]'s motor and employees' compensation portfolios, which continue to face pricing pressures amid soft market conditions. Additional offsetting rating factors include the risks associated with a large investment allocation to properties and an investment fund, with the majority of the latter invested to match the liabilities f a specific personal accident product launched in 2015. Positive rating actions are unlikely in the near term. Negative rating actions could occur if underwriting results deteriorate significantly or if there is a material decline in risk-adjusted capitalization. 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 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases. A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
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