It's not that people don't want to save for retirement, it's because they can't afford to.
A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of South China Insurance Co. (South China Insurance) (Taiwan).
The outlook for both ratings is stable.
The rating affirmations reflect South China Insurance's sound risk-adjusted capitalization, strong operating performance and continued improvement in its market presence in Taiwan. The company has increased its capital and surplus position through consistently favorable underwriting results and the recovery of investment losses in prior years. With management's continuous efforts to enhance the quality and efficiency of its distribution channels, South China Insurance increased its market share to 5.6 percent for the first eleven months in 2012, from 4.7 percent in 2007 in terms of direct premium written. South China Insurance also benefits from its product distribution and risk management as a wholly owned non-life insurance arm of Hua Nan Financial Holdings Co. Ltd.Hua Nan Financial Holdings Co. Ltd. is one of the leading financial conglomerates in the banking (wholly owned Hua Nan Commercial Bank), asset management and other financial services business in Taiwan.
Partially offsetting these positive rating factors are South China Insurance's historical earnings volatility arising from investment and weather-related losses and a high dividend payout, which has impeded the company from further strengthening its risk- adjusted capitalization. Moreover, the sustainability of business growth and underwriting profitability remains challenged under the continuing competitive market and pricing conditions in Taiwan.
Future positive rating actions could occur if South China Insurance can demonstrate significant improvement in its market profile with quality business and a sustainable favorable trend in its operating performance. Alternatively, downward rating actions could occur if the company's risk-adjusted capitalization materially deteriorates or exhibits a downward trend in underwriting or operating profitability.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Additional key criteria utilized include: "Understanding Universal BCAR"; "Catastrophe Analysis in A.M. Best Ratings"; and "Risk Management and the Rating Process for Insurance Companies." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/ methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.
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