Finest’s Information & Analysis Service – March 25, 2022 11:13 AM (EDT)
Hong Kong //BestWire// – AM Finest has affirmed the Monetary Power Ranking of A (Glorious) and the Lengthy-Time period Issuer Credit score Ranking of “a” (Glorious) of Solar Hung Kai Properties Insurance coverage Restricted (SHKPI) (Hong Kong). The outlook of those Credit score Rankings (scores) is steady.
The scores replicate SHKPI’s steadiness sheet energy, which AM Finest assesses as very robust, in addition to its robust working efficiency, impartial enterprise profile and applicable enterprise danger administration.
SHKPI’s risk-adjusted capitalisation, as measured by Finest’s Capital Adequacy Ratio (BCAR), is maintained on the strongest stage. The upper-risk property, together with non-investment-grade bonds and unlisted equities, and a few sector focus within the firm funding portfolio uncovered its risk-adjusted capitalisation to appreciable market and credit score dangers. Nonetheless, AM Finest considers the corporate’s capital buffer is adequate to soak up the related funding dangers. The corporate’s reinsurance programme remained applicable, with reinsurer panels in good credit score high quality.
SHKPI’s general working efficiency has been constantly robust and above the market common. Supported by its guardian in distribution with minimal gross acquisition bills, SHKPI’s underwriting outcomes proceed to outperform trade friends. The corporate’s constructive funding returns stay to be one other revenue driver, although its funding yield has been trending downward lately. The Chinese language actual property sector liquidity crunch and up to date fairness market volatility might add short-term funding efficiency stress on the corporate.
SHKPI is an entirely owned subsidiary of Solar Hung Kai Properties Restricted, one of many largest property growth and funding conglomerates in Hong Kong. It advantages from its parental community to write down most of its enterprise from related and subsidiary firms. The corporate, due to this fact, continues to function in a low acquisition value enterprise mannequin. SHKPI maintains a small albeit worthwhile presence in Hong Kong’s normal insurance coverage market, specializing in workers’ compensation insurance coverage.
The steady outlooks replicate AM Finest’s expectation that SHKPI will preserve its robust working efficiency, supported by a continued worthwhile underwriting portfolio, low acquisition value construction, and constructive funding returns within the intermediate time period. Adverse ranking actions may happen if there’s important deterioration in SHKPI’s working efficiency, for instance, because of decrease funding returns or weakened underwriting outcomes. Adverse ranking actions additionally may come up if SHKPI’s risk-adjusted capitalisation considerably deteriorates, for instance, because of materials funding losses.
Rankings are communicated to rated entities previous to publication. Until acknowledged in any other case, the scores weren’t amended subsequent to that communication.
This press launch pertains to Credit score Rankings which have been printed on AM Finest’s web site. For all ranking info regarding the discharge and pertinent disclosures, together with particulars of the workplace answerable for issuing every of the person scores referenced on this launch, please see AM Finest’s Latest Ranking Exercise internet web page. For added info relating to the use and limitations of Credit score Ranking opinions, please view Information to Finest’s Credit score Rankings. For info on the right use of Finest’s Credit score Rankings, Finest’s Efficiency Assessments, Finest’s Preliminary Credit score Assessments and AM Finest press releases, please view Information to Correct Use of Finest’s Rankings & Assessments.
AM Finest is a world credit standing company, information writer and knowledge analytics supplier specialising within the insurance coverage trade. Headquartered in the USA, the corporate does enterprise in over 100 nations with regional workplaces in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico Metropolis.