KUALA LUMPUR, Dec 16 -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ of Peak Reinsurance Company Limited (Peak Re) Hong Kong and its subsidiary, Peak Reinsurance AG, Switzerland.
The outlook of these Credit Ratings (ratings) is stable, according to a statement.
The ratings reflect Peak Re’s balance sheet strength, which the global credit rating agency, AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Peak Re’s balance sheet strength is underpinned by its robust level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio.
The company’s capital and surplus reported a compounded average growth rate of 9.7 per cent during the five-year period from 2015 to 2019, mainly attributable to capital injections from its shareholders and the full retention of earnings.
The company has also demonstrated favourable financial flexibility, having completed, in October, an issuance of perpetual subordinated guaranteed capital securities of US$250 million. (US$1 = RM4.047)
Given the expanded balance sheet from the hybrid capital issuance, AM Best expects Peak Re will continue to uphold a prudent approach toward business expansion and maintain a robust level of risk-adjusted capitalisation, while gradually refining its underwriting and investment portfolios to strengthen operating performance over the short to intermediate term.
Positive rating actions are unlikely over the near term. Negative rating actions may occur if there is a material deterioration in the company’s risk-adjusted capitalisation, or if there is a deteriorating trend in its operating results.
-- BERNAMA
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