AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of 'a-' (Excellent) of
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect PICC HK's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect the strategic importance of the company to its parent,
PICC HK maintains very strong overall balance sheet strength, supported by risk-adjusted capitalisation at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). The company's investment portfolio is diversified with the majority of its assets allocated to investment-grade bonds, equities, cash and cash equivalents, and funds.
PICC HK's operating performance is considered adequate with a five-year average operating ratio of 97.2% and a five-year average return on equity of 4.3% (2017-2021), as calculated by AM Best. The company's positive earnings were driven mainly by its investment income, supplemented by realised capital and currency exchange gains in 2021. However, the liquidity crunch in
While maintaining its modest presence in
As the sole overseas insurance entity of
Negative rating actions could occur if there is a decline in operating performance to a level that no longer supports the adequate operating performance assessment, or if the support PICC HK receives from its parent weakens notably or the parent's credit fundamentals deteriorate materially.
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.
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