AM Best Affirms Credit Ratings of The People’s Insurance Company of China (Hong Kong), Limited
The ratings reflect PICC HK’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings also reflect the lift that the company receives from its parent, The People’s
The balance sheet strength of the company is supported by its risk-adjusted capitalisation being at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). The company’s share capital of
PICC HK reported an after-tax net loss of
PICC HK remains a small property/casualty insurer in Hong Kong’s highly competitive commercial lines market. The company’s gross and net premium written dropped by 3.1% and 5.9% in 2019, respectively, as a result of its shift in underwriting strategy during the year. The company stopped underwriting its loss-making construction EC business and expanded its third-party inward reinsurance book of business, which was driven by overseas infrastructure projects under China’s Belt and Road initiatives.
As the sole overseas insurance subsidiary within the
Negative rating actions could occur if PICC HK’s operating performance continues to deteriorate such that it no longer supports the current assessment at the adequate level, or the company's ERM fails to contain emerging risks from the evolution of its business profile.
Negative rating actions could occur if
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 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.
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Source: AM Best
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