AM Best Affirms Credit Ratings of Bank of China Group Insurance Company Limited

Business Wire

HONG KONG--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Bank of China Group Insurance Company Limited (BOCG Insurance) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect BOCG Insurance’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

BOCG Insurance’s risk-adjusted capitalisation remained at the strongest level at year-end 2024, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital and surplus increased in 2024, supported by favourable investment income and positive underwriting results. Other supporting factors include its robust regulatory solvency position, as measured by Hong Kong’s Risk-Based Capital Ratio, and its positive liquidity to fulfil insurance liabilities. An offsetting factor in BOCG Insurance’s balance sheet strength assessment is its strategic allocation on illiquid investments in associated companies, which account for approximately one-third of the company’s investment portfolio.

AM Best assesses BOCG Insurance’s operating performance as adequate. In 2024, the company achieved organic growth in insurance services revenue, and improvement in net income compared to 2023 with a double-digit return-on-equity ratio. The company’s profitable bottom line was driven mainly by solid net investment returns, supported by a meaningful share of profits from its interests in associated companies, as well as interest income from its bonds and dividend income from its funds and shares. The company has generated underwriting profits for four consecutive years since 2021.

AM Best assesses BOCG Insurance’s business profile as neutral. BOCG Insurance is ranked sixth in terms of non-life gross premiums written (GPW), with a 3.7% onshore market share in 2024, as per data published by the Hong Kong Insurance Authority. The company’s underwriting portfolio remains diversified, with a majority of its GPW from four business lines, namely accident and health, property damage, general liability, and motor. In addition to ongoing efforts to improve the profitability of its inward reinsurance business, the company strives to expand its direct local business. AM Best expects BOCG Insurance to continue tapping on the extensive branch network and the reputable brand name of its banking parent, Bank of China Group, to access the large client base and generate profitable business. Additionally, the company is improving its direct channel by upgrading its digital platform.

Negative rating actions could occur if BOCG Insurance experiences a material deterioration in its risk-adjusted capitalisation. Negative rating actions also could arise if there is significant deterioration in the company’s operating profitability; for instance, due to investment returns that are more than offset by sustained and unfavourable underwriting loss experience. Although it is not likely in the short term, positive rating actions could occur if BOCG Insurance demonstrates better-than-average operating performance, supported by sustained improvement in underwriting profitability.

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 Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.