China’s Qianhai Reinsurance Co Ltd Credit Ratings affirmed - AM Best

KUALA LUMPUR, Dec 4 -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ of Qianhai Reinsurance Co Ltd (QHR) China.

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

The ratings reflect QHR’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

QHR’s balance sheet strength is supported by its risk-adjusted capitalisation being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), as of 2019-end.

The company delivered its first year of net profit in 2019 since its establishment in December 2016, mainly driven by favourable underwriting results in the traditional life reinsurance business and investment performance, albeit partially offset by the marginal non-life underwriting results.

Going forward, AM Best expects the company’s capital position to strengthen gradually from full earnings retention, while the BCAR results remain supportive of the current ratings over the short to intermediate term.

Amid rising demand for protection-type products in its domestic market, QHR continues to partner with cedant clients in the life reinsurance segment in offering traditional yearly renewable term policies covering health and critical illness.

Although QHR is well-positioned at its current rating level, negative rating actions could occur if the company’s risk-adjusted capitalisation declines significantly due to adverse deviation from its business plan.

More details at www.ambest.com.

-- BERNAMA