A.M. Best Affirms Ratings of Taiping Reinsurance Company Limited

HONG KONG--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Taiping Reinsurance Company Limited (Taiping Re) (Hong Kong). The outlook for both ratings is stable.

The ratings reflect Taiping Re’s solid risk-adjusted capitalization and improved operating performance. The ratings also acknowledge the support Taiping Re receives from its parent, China Taiping Insurance Holdings Company Limited (CTIH), in terms of capital contribution and operational support.

Taiping Re is the only professional reinsurer under CTIH. The company is fully integrated into the group’s operation, and plays a strategic role in the group’s development plan. To support Taiping Re’s expanding non-life portfolio and newly launched life reinsurance portfolio, CTIH made several rounds of capital injections to the reinsurer since 2012, increasing its capital and surplus to HKD 4.5 billion (USD 576 million) at end of 2014. As a result, Taiping Re’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has strengthened in the past few years. The company’s capitalization level is expected to remain solid in the near term, even with the expected strong premium growth in the life reinsurance segment.

Taiping Re has consistently demonstrated strong operating results, except in 2011 and 2012 when the company reported underwriting losses due to a series of severe catastrophe losses occurred in 2011. The company has returned to underwriting profitability since 2013, and the favorable investment performance also made a key contribution to the overall operating profitability in the past few years.

An offsetting rating factor is the soft market conditions in the global reinsurance market. In particular, competition in Asia Pacific, Taiping Re’s core market, has further intensified, with the ongoing new reinsurance capacity entering into the market. In addition, with its global footprint and increasing exposure to catastrophe risk in China, Taiping Re needs to continuously strengthen its catastrophe risk management capabilities.

Ratings are communicated to rated entities prior to publication, and 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Yanwei You

Financial Analyst

+852-2827-3421

yanwei.you@ambest.com

or

Ken Chow

Senior Financial Analyst

+852-2827-3426

ken.chow@ambest.com

or

Christopher Sharkey

Manager, Public Relations

+(1) 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

or

Jim Peavy

Assistant Vice President, Public Relations

+(1) 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: A.M. Best