The ratings reflect UOI’s excellent earnings track record, favorable business profile and strong risk-adjusted capitalization. As a subsidiary of United Overseas Bank Limited (UOB) group, Singapore’s third-largest bank by asset value, UOI maintains a stable market presence despite challenging market conditions through cross-selling initiatives with the group. The company continues to register strong underwriting margins that are above its peers, supported by a favorable claims experience and a low expense ratio averaging 20% in the five years ending in 2016.

An offsetting rating factor is the small and competitive operating landscape, which limits the company’s growth opportunities in Singapore. In response, management has introduced strategies aimed at expanding its regional business through the UOB group’s regional network. A.M. Best expects UOI’s focus on prudent underwriting and its efficient operating model to mitigate the risks associated with regional growth.

Positive rating actions are unlikely in the near term. Negative rating actions may arise if there is material deterioration of UOI’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 Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

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