KUALA LUMPUR, May 27 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Hong Kong’s FuSure Reinsurance Company Limited (FuSure).
In a statement, AM Best said these credit ratings (ratings) which have a stable outlook reflected FuSure’s balance sheet strength, which was assessed as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings also reflect the implicit and explicit support from its ultimate parent, Tencent Holdings Limited (Tencent), including capital, business development, investment, risk management and operational support.
The credit rating agency expects FuSure’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, will remain at the strongest level until 2027, according to the company’s provided business plan.
The company has maintained a prudent investment strategy with its invested assets consisting predominantly of investment-grade fixed-income securities and cash and cash equivalents, and has made an effort in diversifying its retrocessionaire panel in recent years.
In its projection period (2024-2027), FuSure targets double-digit gross premium written growth, while maintaining low single-digit return on equity. Underwriting volatility is limited due to less volatile health coverage nature of key treaties the company has underwritten, while investment yield is forecast to be stable at a low single-digit, supported by its short-duration fixed-income invested assets.
With three years of operating history, the company is actively establishing its expertise and market presence in health and accident lines in the Greater China region at its start-up phase, leveraging on Tencent’s support in business development and distribution.
While strengthening its core health business with product innovation, FuSure also plans to diversify its product offering and geographic reach from open market business in the medium term.
Tencent has a sizeable balance sheet and is listed on the Hong Kong Stock Exchange, with high financial flexibility and excellent credit fundamentals, and has demonstrated its commitment to FuSure via capital injection in 2023 for supporting its business growth.
AM Best expects FuSure will continue benefitting from the parent group in all aspects of operations and management, as well as particularly effective use of innovation and technology that could lead to competitive advantages in product design and pricing sophistication.
-- BERNAMA
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