HONG KONG, Aug 1 (Bernama-BUSINESS WIRE) -- A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Central Reinsurance Corporation (Central Re) (Taiwan). The outlook for each rating remains stable.
 
The rating affirmations reflect Central Re’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), stable and positive underwriting results (after compulsory auto liability insurance (CALI) reserve release) in recent years and its competitive advantage being the sole domestic commercial reinsurer in Taiwan’s reinsurance market.
 
Central Re maintains a solid risk-adjusted capitalization level, and the recent Tainan earthquake had little impact on its risk-based capitalization. The company’s underwriting performance after the CALI reserve release is positive and stable since 2013 mainly due to the absence of severe catastrophe losses. The CALI business on its own has suffered ongoing underwriting losses; however, Central Re’s net profit has not been negatively impacted, as the CALI underwriting losses have been offset by a special CALI reserve release.
 
Offsetting rating factors include the challenges Central Re faces in the current soft market conditions and its potential capital volatility from overseas catastrophe loss exposures. Central Re retains most of the overseas catastrophe loss exposures, which are supported by its capital and special reserves. Should a severe overseas catastrophe loss occur, Central Re’s capital level could be lowered by a relatively high percentage compared with its regional peers.
 
Positive rating actions for Central Re are unlikely in the near term. Negative rating actions could occur if potential capital volatility continues to increase.
 
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.
 
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.
 
Contacts
A.M. Best
Vivian Cheung, +852 2827 3421
Senior Financial Analyst
vivian.cheung@ambest.com
or
Moungmo Lee, +65 6589 8412
Managing Director, Analytics
moungmo.lee@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best
 
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http://www.businesswire.com/news/home/20160729005709/en

--BERNAMA