KUALA LUMPUR, March 1 (Bernama) -- AM Best has affirmed the Financial Strength Rating of B+ (good) and the Long-Term Issuer Credit Rating of ‘bbb-’ of Tugu Insurance Company Limited (TIC) Hong Kong.
The negative outlook of these ratings reflects TIC’s balance sheet strength, which AM Best categorised as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.
According to a statement, the company’s strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio is supported by its low underwriting leverage.
As a small non-life insurer in Hong Kong, TIC’s premium volume has declined sharply over the past five years as the company discontinued some unprofitable businesses in Hong Kong and increased its reinsurance cession.
Last year, it reported an underwriting profit mainly contributed by a reserve release which AM Best believed that a similar scale of reserve release was unlikely to repeat year-over-year, so the operating profitability would remain dependent on investment income.
Positive rating actions are unlikely in the near term while negative rating actions could occur if there is a material decline in the company’s risk-adjusted capitalisation and liquidity position, or if its business volume shrinks materially.
AM Best is a global rating agency and information provider with unique focus on the insurance industry. For more information, contact www.ambest.com.
-- BERNAMA
-- BERNAMA
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