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FOR IMMEDIATE RELEASE
HONG KONG - JULY 30, 2015 12:51 PM (EDT)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Starr Property & Casualty Insurance (China) Company, Limited (Starr China) (China). The outlook for both ratings is stable.
The ratings reflect Starr China's adequate and improving level of risk-adjusted capitalization, its prudently managed investment portfolio and its knowledgeable management team in commercial lines and specialty risks underwriting. The ratings also benefit from the business and operational support of Starr International Company, Inc. (SICO) and its insurance subsidiaries and the capital commitment from Starr Insurance & Reinsurance Limited (SIRL), one of the affiliated companies within SICO, which is a 20% shareholder of Starr China.
Starr China's risk-adjusted capitalization improved in 2014 as a result of moderate growth in its capital and surplus, reduction in underwriting leverage and moderate investment risk profile. The reduction in Starr China's underwriting leverage was primarily due to the company's strategy to reduce the size of its motor portfolio, which has delivered unfavorable underwriting results in recent years. Going forward, Starr China will target growth in commercial lines to achieve a diversified portfolio while maintaining moderate underwriting leverage.
Starr China benefits from brand recognition as a member under SICO. The degree of Starr China's managerial integration with SICO and its insurance company subsidiaries continues to deepen. SICO provides operational and technical support to Starr China, including underwriting, catastrophe modeling and enterprise risk management. SIRL also provided reinsurance support, including a stop-loss arrangement, to help stabilize Starr China's profitability.
Partially offsetting these rating factors is the competitive non-life insurance market in China. Underwriting profit margin for most non-life insurance lines of business in China continues to be under pressure due to aggressive competitors in the market, which will continue to challenge Starr China to improve its operating performance.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
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