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

ENPNewswire-October 29, 2021--AM Best Affirms Credit Ratings of Bank of China Group Insurance Company Limited

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Release date- 28102021 - 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 strong balance sheet strength assessment is underpinned by its strongest level of risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR). The company's capital and surplus continued to grow organically in 2020, supported by profit retention and favourable capital gains. BOCG Insurance's investments in associated insurance companies comprise almost half of its investment portfolio, while the remainder mainly consists of investment grade bonds. Despite the high proportion of investments in such unlisted equities, the company maintains a supportive level of liquidity. In addition, the company has been strengthening its reserve for its major lines of business over the previous years.

BOCG Insurance's five-year average return-on-equity ratio is 7.5%, mainly supported by investment returns from BOCG Insurance's share of associate companies, which accounted for over half of the company's investment income in 2020, as well as a stable stream of interest and dividend income. The company recorded a combined ratio above 100% over the past five years (2016 to 2020), mainly due to unfavourable technical results from some of its key lines of business. As part of its continued efforts to improve underwriting profitability, the company either trimmed or limited growth in non-performing books and channels.

BOCG Insurance is ranked seventh in the Hong Kong onshore non-life market, with a market share of 3.1% in terms of gross written premium in 2020. The company's underwriting portfolio remains diversified with four major product lines, namely property damage, accident and health, motor and general liability. Going forward, AM...

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