CONTACTS:
FOR IMMEDIATE RELEASE
HONG KONG - OCTOBER 20, 2016 01:15 PM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of China Reinsurance (Group) Corporation (China Re) and its members, China Property & Casualty Reinsurance Company Ltd. (China Re P&C), China Life Reinsurance Company Ltd. (China Re Life) and China Continent Property & Casualty Insurance Company Ltd (China Continent Insurance). The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in China.
The ratings of China Re, China Re P&C, China Re Life and China Continent Insurance (collectively known as China Re Group) reflect the group’s very strong consolidated risk-adjusted capitalization, leading market position in China’s reinsurance market and adequate operating results. China Re Group’s ratings also reflect its explicit support from majority shareholder, Central Huijin Investment Ltd (CHIL). CHIL is a wholly owned subsidiary of China Investment Corporation (CIC), which is the sovereign wealth fund of the People’s Republic of China.
These positive rating factors are partially offset by the low underwriting profitability of China Re Group’s non-life reinsurance segment (primarily consisting of China Re P&C) compared with global reinsurance peers, as reflected by its net combined ratios. In recent years, the group’s overall operating performance has been adequate but has remained reliant on investment results that can fluctuate from year to year depending on financial market conditions. In addition, the competitive environment in China’s primary non-life insurance industry continues to put pressure on China Continent Insurance’s underwriting profitability.
China Re’s ratings extend to China Re P&C, China Re Life and China Continent Insurance based on the strategic importance of these subsidiaries and the high level of integration, and implicit and explicit support that A.M Best believes will continue.
Positive rating movement could occur if China Re Group can achieve sustained improvement in its business profile and underwriting results compared with global peers, while maintaining its very strong risk-adjusted capitalization.
Negative rating movement could occur if China Re Group’s consolidated risk-adjusted capitalization declines materially, or there is significant deterioration in China Re Group’s underwriting or investment performance.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.