UOI’s rating reflects the company’s strong risk-adjusted capitalization, excellent operating performance and its favorable business profile as a member of the United Overseas Bank Limited (UOB) group, Singapore’s third largest bank by asset value. UOI’s strong risk-adjusted capitalization, as evaluated by Best’s Capital Adequacy Ratio, is supported by its low gross and net underwriting leverage.

UOI continues to register better profitability compared with the overall market. Its affiliated bancassurance channel is a competitive advantage that has helped the company generate good quality business in a cost efficient manner. This has enabled UOI to outperform its peers despite the difficult operating landscape. These strengths are partially offset by a larger proportion of fire business in its portfolio, leaving it susceptible to the lackluster property market in Singapore. Nonetheless, A.M. Best expects UOI’s healthy book of in-force business and low net expense ratio to mitigate expense strain that could arise from slower business growth.

While positive rating actions are not likely, negative rating actions may arise if there is a significant deterioration in the company’s operating results or risk-adjusted capitalization.

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 rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.