KUALA LUMPUR, April 8 -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of A (excellent) and the Long-Term Issuer Credit Rating of ‘a’ of Sun Hung Kai Properties Insurance Limited (SHKPI) Hong Kong.
The outlook of these Credit Ratings is stable. The ratings reflect SHKPI’s balance sheet strength, which AM Best categorised as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
SHKPI’s balance sheet strength is underpinned by its risk-adjusted capitalisation being at the strongest level, as measured by Best’s Capital Adequacy Ratio. This result mainly reflects its strong liquidity, high quality of capital and appropriate reinsurance programme.
However, SHKPI’s investment portfolio shows an appetite to invest in higher-risk assets, which exposes its overall earnings to considerable market and credit risks. These risks are mitigated partially by the company’s significant level of excess capital.
SHKPI’s strong operating performance, demonstrated by a five-year weighted average return on equity of 18 per cent, has been driven by solid underwriting results and consistent investment returns, according to a statement.
SHKPI’s business profile is neutral, due in part to its affiliation with Sun Hung Kai Properties Limited, one of the largest and most well-established property development and investment conglomerates in Hong Kong.
The stable outlooks reflect AM Best’s expectation that SHKPI’s operating performance will remain at a strong level, underpinned mainly by its continued focus on profitable underwriting, low acquisition costs and positive investment returns.
-- BERNAMA
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