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FOR IMMEDIATE RELEASE
SINGAPORE - MAY 17, 2018 11:49 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of China Taiping Insurance (Singapore) Pte. Ltd. (CTIS) (Singapore), a wholly owned subsidiary of China Taiping Insurance Holdings Company Ltd. (CTIH). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect CTIS’ balance sheet strength, which A.M. Best categorizes as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the lift the company receives from its parent, CTIH.
The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is at the strongest level, supported by good asset quality and low underwriting leverages.
CTIS has a good earnings track record, as demonstrated by a five-year average return on equity of close to 10%. Income derived from its sizable investment portfolio has been a stable contributor to CTIS’ operating results.
Offsetting rating factors include increasing negative pressure on operating performance amid soft market conditions and competitive pressures. While underwriting margins remain positive, CTIS’ operating performance lead has narrowed and converged toward Singapore’s non-life industry average over the past five years.
Positive rating actions are unlikely in the near term. Negative rating actions may occur from a failure to regain its operating performance lead over the industry average. An unfavorable reassessment of CTIS’ strategic role in the group also could result in negative rating actions.
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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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