AP NEWS

AM Best Affirms Credit Ratings of Hong Leong Insurance (Asia) Limited

January 11, 2019

HONG KONG--(BUSINESS WIRE)--Jan 11, 2019--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Hong Leong Insurance (Asia) Limited (HLIA) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect HLIA’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

HLIA’s very strong balance sheet assessment mainly reflects its capital size and low underwriting leverage. Given the volume of risks that the company writes and retains, the capital required to support its book of business is relatively modest, which supports its risk-adjusted capitalization being at the strongest level.

Both underwriting and investment results have been consistently positive, contributing to combined ratios of under 80% and operating ratios of below 70% over the past three years. The strong and consistent underwriting results are attributable mainly to the company being very selective in the type of business it chooses to underwrite and retain. For instance, in recent years, it has reduced its exposure to workers’ compensation and continued to stay away from highly competitive product lines, such as motor insurance.

HLIA has good market positions in some niche segments within its domestic insurance market, primarily in travel insurance and domestic helper insurance. In addition, a significant portion of the company’s new business is now sourced from direct marketing and the company’s online portal, both of which contribute to its lower commission cost structure. Nevertheless, HLIA’s small market share and narrow product offerings have constrained its business profile assessment.

The stable outlooks reflect AM Best’s expectation that HLIA will maintain underwriting results that outperform the industry composite, supported by steady revenue growth, a low acquisition cost structure and favorable claims experience for its core product lines.

Downward rating pressure could result if there is significant deterioration in its risk-adjusted capitalization or financial performance. Additionally, the ratings may be downgraded if there is material deterioration in the credit profile of HLIA’s parent company, Hong Leong Financial Group Berhad.

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 web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190111005405/en/

CONTACT: Jason Shum

Associate Director, Analytics

+852 2827 3424

jason.shum@ambest.comChristie Lee

Director, Analytics

+852 2827 3413

christie.lee@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comJim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: EUROPE ASIA PACIFIC HONG KONG

INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE

SOURCE: AM Best

Copyright Business Wire 2019.

PUB: 01/11/2019 12:57 PM/DISC: 01/11/2019 12:57 PM

http://www.businesswire.com/news/home/20190111005405/en

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