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FOR IMMEDIATE RELEASE
HONG KONG - MARCH 24, 2014 11:39 AM (EDT)
A.M. Best has affirmed the financial strength rating of A (Excellent) and issuer credit rating (ICR) of "a" of China Taiping Insurance (Macau) Co., Ltd. (CTIM) (Macau). The outlook for both ratings is stable.
The rating affirmations recognize CTIM's sound risk-adjusted capitalization, consistently favorable underwriting results and strong business profile in the Macau non-life market.
CTIM has demonstrated a favorable track record of profitable operating results over the past few years. The performance was mainly driven by the continued improvement in the underwriting profits, which reflected the company's strengthened underwriting risk selection and pricing capability as a result of its leading market position in Macau. In addition, CTIM's investment portfolio contributed good liquidity and profitable overall investment earnings over the past few years. Going forward, it is expected that CTIM's positive retained earnings, albeit with a relatively high dividends payout ratio, will gradually improve its risk-adjusted capitalization.
Partially offsetting rating factors include the drag on the underwriting profits due to the consistently high combined ratio in the motor line and the relatively high volatility in the investment earnings due to fluctuations in the unrealized values of equity securities and unit trust funds.
While positive rating actions are unlikely in the short term, negative rating pressure could arise if CTIM's risk-adjusted capitalization and/or operating results were to materially deteriorate.
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.
This rating announcement has been issued by A.M. Best Asia-Pacific Limited, which 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.