2014-04-29 18:47:03 -
A.M. Best has upgraded the financial strength rating to A+ (Superior) from A (Excellent) and issuer credit rating to “aa-“ from “a+” of United Overseas Insurance Limited (UOI) (Singapore). The outlook for both ratings has been revised to stable from positive.
The ratings reflect UOI’s excellent risk-adjusted capitalization, outstanding operating performance and well-established presence in the personal and small and medium enterprise (SME) insurance market in Singapore. The ratings also acknowledge UOI’s enhanced enterprise risk management framework.
UOI continues to maintain an excellent level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) and the local regulatory capital adequacy ratio. Given its forecasted business growth, UOI’s risk-adjusted capitalization is expected to remain strong in the near term.
UOI has a proven
track record of outstanding operating results. The company has significantly outperformed the Singapore general insurance market in terms of underwriting performance. The favorable return from its investment portfolio also contributed to UOI’s profitable operation.
As a key member of the United Overseas Bank Limited (UOB) group, UOI benefits from its extensive client and distribution networks in addition to its brand name recognition, which provide UOI with a competitive advantage in the personal and SME business segments. UOI also receives support from UOB in terms of investments and risk management.
One of the offsetting rating factors is the potential volatility in UOI’s investment returns. With a sizable amount of equity investments, UOI's investment performance could be impacted by any negative movement in the equity market. However, UOI’s current level of capitalization is adequate to absorb the potential investment earnings volatility over the short to medium term.
UOI is well positioned at its current rating level. Negative rating actions could occur if UOI’s risk-adjusted capitalization declines to a level below A.M. Best’s expectations, resulting from significant deterioration in operating performance.
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.
This rating announcement has been issued by A.M. Best Asia-Pacific Limited, which 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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