KUALA LUMPUR, March 30 (Bernama) -- A.M. Best has affirmed the financial strength rating of A (excellent) and the long-term issuer credit rating of 'a' of China Taiping Insurance (Macau) Co Ltd (CTIM) Macau.
"The outlook of these credit ratings is stable," A.M Best said in a statement.
"The ratings reflect CTIM's balance sheet strength, which A.M. Best categorised as adequate, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
"The ratings also reflect the lift that the company receives from its parent, China Taiping Insurance Holdings Co Ltd," the statement added.
CTIM's risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), dropped to the adequate level at year-end 2017 due to significant additional reinsurer credit risk related to reinsurance recoverables from Typhoon Hato - a 1-in-50-year storm that struck in August 2017 - and major losses in the following month from the SJM's Grand Lisboa Palace fire.
The company's reinsurer panel is highly rated and the vast majority of the typhoon claims are expected to be settled and closed within one year, A.M. Best expects the risk-adjusted capitalisation to return to the strongest level within the next two years.
CTIM maintains a leading market position in Macau, with strong operating performance and a five-year average return on equity of 22.3 per cent from 2012 to 2016.
The company achieved net profits in 2017 due to investment income, despite the occurrence of two severe underwriting events.
A.M. Best is the world's oldest and most authoritative insurance rating and information source.
--BERNAMA
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