AM Best Affirms Credit Ratings of Shinkong 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” of Shinkong Insurance Company Limited (Shinkong Insurance) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.

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

The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at a robust level in 2018, underpinned by continued earnings retention, the accumulation of special reserves, a prudent reinsurance arrangement and lower asset risk from the de-risking of equity investments during the year.

Shinkong Insurance’s operating performance has been supported by profitable underwriting and investment results over the past five years. The company sustained an improving trend on its overall loss ratio in 2018, mainly attributed to a better-than-average claims experience in the voluntary personal motor line. Coupled with stable expense ratios and positive net investment yields, the company has delivered an average double-digit adjusted return on equity over the past five years.

Moreover, Shinkong Insurance maintains a well-established business profile in Taiwan’s non-life insurance segment and consistently has held the third-largest market share over the past decade in terms of gross premiums written.

Partially offsetting rating factors include the persistently high level of market competition and heightened volatility in domestic and foreign capital markets.

While positive rating actions are unlikely in the near term, negative rating actions could occur if the company exhibits material and sustained deterioration in operating performance or if there is a substantial decline in its 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 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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.