AM Best Assigns Credit Ratings to SAIC Motor Insurance Limited

Business Wire

HONG KONG--(BUSINESS WIRE)--
AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to SAIC Motor Insurance Limited (SAIC Captive) (Hong Kong). The outlook assigned to these Credit Ratings (ratings) is stable.

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

Incorporated in 2025 in Hong Kong, SAIC Captive is a single-parent captive of SAIC Motor Corporation Limited (SAIC Motor), the largest state-owned motor manufacturer in China. SAIC Motor is majority owned by Shanghai Automotive Industry (Group) Co., Ltd. (SAIC Group), the ultimate parent, which is wholly owned by the Shanghai municipal government. SAIC Captive serves as a dedicated risk management and insurance arm of SAIC Motor. During its start-up phase, the captive primarily focuses on underwriting individual motor liabilities for SAIC Motor-produced vehicles—encompassing motor extended warranty, product replacement coverage and expense reimbursement insurance, while prudently retaining group-related commercial risks.

SAIC Captive’s very strong balance sheet strength assessment is supported by its initial capital of USD 49 million, and its risk-adjusted capitalisation level, as measured by Best’s Capital Adequacy Ratio (BCAR), which is projected to remain at the strongest level according to its initial five-year plan (2026-2030). This is attributed to low underwriting leverage, prudent investment portfolio, strong liquidity and appropriate reinsurance consideration.

SAIC Captive projects moderate early-stage underwriting losses due to upfront start-up expenses; however, it also expects a turnaround within the first five years of operation. The company forecasts that its bottom line will be largely supported by investment income, yielding an average mid-to-low-single-digit return on capital and surplus over the next five years. AM Best believes that SAIC Captive’s overall operational and business execution risks are manageable, partially offset by the company’s management experience, underwriting know-how and data accumulation of its key business lines.

Negative rating actions could occur if SAIC Captive's operating performance materially deviates from its business plan. Negative rating actions also could arise if there is a reduced level of support from SAIC Motor that would hinder the company’s business execution. Positive rating actions could occur if the captive demonstrates sustained and favourable results to strengthen its overall operating performance.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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.