KUALA LUMPUR, Jan 10 (Bernama) -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ (Excellent) of Hong Leong Insurance (Asia) Limited (HLIA) Hong Kong.
The outlook of these Credit Ratings (ratings) is stable, according to a statement.
The ratings reflect HLIA’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
HLIA’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).
The assessment also reflects HLIA’s low underwriting leverage and a reinsurance programme of good quality. Offsetting factors include the company’s modest capital size, some concentration risk in a real estate and moderate reinsurance dependency.
HLIA’s strong operating performance is evidenced by positive underwriting results, with a five-year average net combined ratio of approximately 80 per cent and a five-year average return on equity of 8.7 per cent.
HLIA maintains a small market presence in Hong Kong’s general insurance market. While the company focuses on personal lines, it is expanding its commercial lines business to offset the drop in premium from travel insurance amid COVID-19.
In regard to distribution, HLIA continues to utilise its online platform and direct channel to source new personal lines business and cross-sell with low acquisition expense. The company also plans to expand its distribution channels by cooperating with some intermediaries.
The company’s risk profile shows moderate business concentration risk given that it is a local insurer in a small market and has some asset concentration.
Nevertheless, AM Best considers the company’s risk management capabilities to be aligned appropriately with its risk profile, supported mainly by the company’s prudent underwriting guidelines and robust reinsurance programme.
More details at www.ambest.com.
-- BERNAMA
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