A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb+” of Hyundai Insurance (China) Co., Ltd. (HIC) (China).
The ratings reflect HIC’s strong risk-adjusted capitalization, diversified premium portfolio and the excellent liquidity of its investment portfolio. Furthermore, the ratings factor in the parental support HIC receives from Hyundai Marine and Fire Insurance Co. Ltd, in the form of an experienced management team in underwriting, claims and reinsurance.
HIC’s risked-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has been strengthened further as the parent has injected another RMB 100 million into the company as of May 2010. HIC’s absolute capitalization as of June 2010 stood at RMB 242 million, and its risk-adjusted capitalization is expected to remain strong as the net premium leverage (net premiums written over capital) is expected to stay below 0.5 times over the next three years.
HIC has a diversified business portfolio, of which commercial property accounted for 34% of the total gross premium income for the six-month period ending June 30, 2010. Other major lines of business include marine (29%), motor (16%), engineering (15%) and liability (6%). HIC has maintained multiple sources of premiums through direct sales, agents and broker channels. While the company has maintained its existing relationship with the Korean customer network, it continues to penetrate into the Chinese customer base through the inward reinsurance business. In addition, the new branch in Shandong is expected to contribute to top line growth starting 2011.
HIC is committed to maintaining an excellent liquidity position through a conservative investment strategy in the near term. The investment portfolio is predominately composed of cash and term deposits (99% of its invested assets). This conservative investment strategy translates into higher financial flexibility with a consistent level of investment income, particularly during volatile financial markets.
These positive rating factors are offset by a potential volatility in underwriting performance due to high catastrophe risk retention relative to its absolute capital base and the high expense ratio during its start-up phase.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Understanding Universal BCAR”; “Natural Catastrophe Stress Test Methodology”; and “Rating Members of Insurance Groups”. Methodologies can be found at www.ambest.com/ratings/methodology.
Wednesday, December 22, 2010
Subscribe to:
Post Comments (Atom)
Wednesday, December 22, 2010
A.M. Best Revises Outlook to Positive for Hyundai Insurance (China) Co., Ltd.
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb+” of Hyundai Insurance (China) Co., Ltd. (HIC) (China).
The ratings reflect HIC’s strong risk-adjusted capitalization, diversified premium portfolio and the excellent liquidity of its investment portfolio. Furthermore, the ratings factor in the parental support HIC receives from Hyundai Marine and Fire Insurance Co. Ltd, in the form of an experienced management team in underwriting, claims and reinsurance.
HIC’s risked-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has been strengthened further as the parent has injected another RMB 100 million into the company as of May 2010. HIC’s absolute capitalization as of June 2010 stood at RMB 242 million, and its risk-adjusted capitalization is expected to remain strong as the net premium leverage (net premiums written over capital) is expected to stay below 0.5 times over the next three years.
HIC has a diversified business portfolio, of which commercial property accounted for 34% of the total gross premium income for the six-month period ending June 30, 2010. Other major lines of business include marine (29%), motor (16%), engineering (15%) and liability (6%). HIC has maintained multiple sources of premiums through direct sales, agents and broker channels. While the company has maintained its existing relationship with the Korean customer network, it continues to penetrate into the Chinese customer base through the inward reinsurance business. In addition, the new branch in Shandong is expected to contribute to top line growth starting 2011.
HIC is committed to maintaining an excellent liquidity position through a conservative investment strategy in the near term. The investment portfolio is predominately composed of cash and term deposits (99% of its invested assets). This conservative investment strategy translates into higher financial flexibility with a consistent level of investment income, particularly during volatile financial markets.
These positive rating factors are offset by a potential volatility in underwriting performance due to high catastrophe risk retention relative to its absolute capital base and the high expense ratio during its start-up phase.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Understanding Universal BCAR”; “Natural Catastrophe Stress Test Methodology”; and “Rating Members of Insurance Groups”. Methodologies can be found at www.ambest.com/ratings/methodology.
The ratings reflect HIC’s strong risk-adjusted capitalization, diversified premium portfolio and the excellent liquidity of its investment portfolio. Furthermore, the ratings factor in the parental support HIC receives from Hyundai Marine and Fire Insurance Co. Ltd, in the form of an experienced management team in underwriting, claims and reinsurance.
HIC’s risked-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has been strengthened further as the parent has injected another RMB 100 million into the company as of May 2010. HIC’s absolute capitalization as of June 2010 stood at RMB 242 million, and its risk-adjusted capitalization is expected to remain strong as the net premium leverage (net premiums written over capital) is expected to stay below 0.5 times over the next three years.
HIC has a diversified business portfolio, of which commercial property accounted for 34% of the total gross premium income for the six-month period ending June 30, 2010. Other major lines of business include marine (29%), motor (16%), engineering (15%) and liability (6%). HIC has maintained multiple sources of premiums through direct sales, agents and broker channels. While the company has maintained its existing relationship with the Korean customer network, it continues to penetrate into the Chinese customer base through the inward reinsurance business. In addition, the new branch in Shandong is expected to contribute to top line growth starting 2011.
HIC is committed to maintaining an excellent liquidity position through a conservative investment strategy in the near term. The investment portfolio is predominately composed of cash and term deposits (99% of its invested assets). This conservative investment strategy translates into higher financial flexibility with a consistent level of investment income, particularly during volatile financial markets.
These positive rating factors are offset by a potential volatility in underwriting performance due to high catastrophe risk retention relative to its absolute capital base and the high expense ratio during its start-up phase.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Understanding Universal BCAR”; “Natural Catastrophe Stress Test Methodology”; and “Rating Members of Insurance Groups”. Methodologies can be found at www.ambest.com/ratings/methodology.
Subscribe to:
Post Comments (Atom)
0 comments on "A.M. Best Revises Outlook to Positive for Hyundai Insurance (China) Co., Ltd."
Post a Comment