COSCO SHIPPING Captive is a newly incorporated pure captive of
The ratings reflect COSCO SHIPPING Captive’s balance sheet strength, which
COSCO SHIPPING Captive’s very strong balance sheet strength is supported by a large initial injection of
Offsetting rating factors include the company’s high-severity, low-frequency product risk profile and small net premium base, exposing it to potential volatility in its underwriting result. The captive also faces execution risk in achieving its business plan, as well as an additional layer of pricing and reserving risk due to lack of operating history.
While positive rating actions are unlikely in the near term, negative rating actions could occur if there is significant adverse deviation in the company’s operating performance from its business plan, or if there is material decline in its risk-adjusted capitalization due to major losses or much faster-than-expected new business growth. Negative rating actions also could occur if there is a reduced level of support from COSCO SHIPPING or a significant deterioration in COSCO SHIPPING’s financial strength or credit profile.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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