AM BEST AFFIRMS PICC HK’S CREDIT RATINGS AS EXCELLENT

KUALA LUMPUR, June 22 (Bernama) -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of The People’s Insurance Company of China (Hong Kong), Limited (PICC HK).

In a statement, the global credit rating agency said the outlook of these Credit Ratings (ratings) is stable.

The ratings reflected PICC HK’s balance sheet strength, which AM Best assessed as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings also reflected the strategic importance of the company to its parent, The People’s Insurance Company (Group) of China Limited (PICC Group), as the sole overseas insurance entity and a key component of PICC Group’s overseas strategies.

PICC HK’s very strong balance sheet is underpinned by its strongest risk-adjusted capitalisation level, as measured by Best’s Capital Adequacy Ratio.

The company maintains strong liquidity and holds a well-diversified investment portfolio, which mainly consists of investment-grade bonds, cash and cash equivalents, as well as preference shares, with the remainder allocated in listed equities and funds.

AM Best assessed PICC HK’s operating performance to be adequate with the company having achieved a five-year average operating ratio of 95.0 per cent (2018-2022), mainly supported by its robust net investment income from its diversified investment portfolio.

The company’s business profile is assessed as limited in which PICC HK underwrites direct onshore general insurance in Hong Kong and inward reinsurance from mainland China and other geographic regions.

With the establishment of its Macau branch in 2022, PICC HK is eligible to provide one-stop motor insurance policy covering mainland China’s greater bay area, Hong Kong and Macau.

Positive rating actions could occur if PICC HK further enhances its market presence in the local insurance market, as well as further diversifies its reliance on affiliated companies and continues improving its business profile.

-- BERNAMA