2013-08-15 18:02:02 -
A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Luen Fung Hang Insurance Company Limited (LFH) (Macau). The outlook for both ratings is stable.
The ratings reflect LFH’s excellent business profile, strong underwriting results and its stable income from invested assets.
LFH enjoys an excellent business profile in Macau as a general insurance company co-owned by several banks and insurance companies with either a Macau, Hong Kong or China background. The shareholders provide support to LFH in different areas, such as business distribution and risk management.
Benefiting from the good quality of business written through its bancassurance and direct channel, LFH has been able to deliver underwriting profits in a consistent manner.
In addition, a broad-based relief in the expense ratio across most lines further enhanced underwriting results in 2012. The high proportion of bonds in the investment portfolio also yielded stable interest income for the company.
Despite LFH’s excellent business profile and strong operating performance, its buffer level of risk-adjusted capitalization, although remaining supportive of its current ratings, is less than its peers.
Positive rating actions could occur as a result of LFH’s continued surplus accumulation through profit retention. Downward rating pressures could arise if there is a significant deterioration in the company’s risk-adjusted capitalization.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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