The rating affirmations reflect MIC’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and improved underwriting performance in fiscal-year 2015. MIC continues to maintain strong balance sheet strength due to its conservative level of net premium leverage, sound liquidity, a prudent investment strategy and comprehensive reinsurance program.
Offsetting rating factors include MIC’s historically lower underwriting profit margin compared with its peer competitors in Macau’s non-life insurance segment. Underwriting profitability in two of its major retained business lines, motor and employee compensation, remains challenging amid increased competition and higher claims inflation.
Positive rating actions could occur if MIC demonstrates consistent improvement in its business profile and underwriting performance, coupled with a strong level of risk-adjusted capitalization. Negative rating actions could occur if MIC’s operating performance falls short of its business plan projection or if there is a decline in the company’s risk-adjusted capitalization.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
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Senior Financial Analyst
Moungmo Lee, +65 6589 8412
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