AM Best


A.M. Best Upgrades Ratings of Blue Cross (Asia-Pacific) Insurance Limited


CONTACTS:

Ken Chow
Senior Financial Analyst
+852-2827-3426
ken.chow@ambest.com

Jeff Yeung
Associate Director, Analytics
+852-2827-3413
jeff.yeung@ambest.com

Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

HONG KONG - AUGUST 28, 2015 01:08 PM (EDT)
A.M. Best has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit rating to "a" from "a-" of Blue Cross (Asia-Pacific) Insurance Limited (Blue Cross) (Hong Kong). The outlook for both ratings has been revised to stable from positive.

The upgrade reflects Blue Cross' continued favorable operating performance over the past five years. The company has maintained its strong risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR) in fiscal year 2014 and strong business profile as one of the leading insurers in the accident and health insurance market in Hong Kong, in particular the group and individual medical products. The ratings also recognize Blue Cross' efforts and strategy to further improve its diversity in product mix and distribution channels.

Blue Cross' capitalization, as measured on a risk-adjusted and local solvency basis, is considered to be strong and is expected to provide continued support to the company's ongoing business operation and development. Statutory solvency ratio has remained well above 300% over the past years.

The company has continued its strong operating results since 2014, mainly driven by the stable and favorable claims experience in the company's core accident and health business, as well as the consistently improving trend in expense controls. In terms of investment performance, Blue Cross benefited from a stable stream of interest and dividend income over the past five years, which has helped the company partially absorb the volatility in net realized and unrealized gains or losses and the investment revaluation reserve.

Partially offsetting rating factors include the competitive operating environment and the inflationary trend in medical insurance. Volatility in the financial market can also have a flow-on effect on the performance of Blue Cross' run-off life business and solvency ratio.

Positive rating actions could occur if Blue Cross can demonstrate improved business profile and enterprise risk management, while maintaining consistently favorable operating performance and a superior risk-adjusted capitalization.

Negative rating actions could occur if the company's risk-adjusted capitalization weakens from its current level or a deteriorating trend in underwriting profitability emerges.

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.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.

AMB# Company Name
090678 Blue Cross (Asia-Pacific) Insurance Ltd