HONG KONG, Nov 3 (Bernama-BUSINESS WIRE) -- Fourth paragraph, first sentence of release dated October 30, 2020, should read: BOCGI’s adequate operating performance is supported by a five-year average return-on-equity ratio of 8.4% (instead of BOCGI’s adequate operating performance is supported by a five-year average return-on-equity ratio of 8.1%).
The updated release reads:
AM BEST ASSIGNS CREDIT RATINGS TO BANK OF CHINA GROUP INSURANCE COMPANY LIMITEDAM Best has assigned a Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” to the Bank of China Group Insurance Company Limited (BOCGI) (Hong Kong). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect BOCGI’s balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
BOCGI’s strong balance sheet strength assessment is underpinned by its strongest level of risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital and surplus continued to grow organically in 2019, supported by positive operating results. The company has historically experienced adverse reserve development for its major lines of business. To strengthen its reserve risk management capability, the company extended the external actuarial’s reserve review scope. BOCGI’s investments in associate insurance companies comprise almost half of its investment portfolio, while the remainder mainly consists of investment grade bonds.
BOCGI’s adequate operating performance is supported by a five-year average return-on-equity ratio of 8.4%. Overall net profit is mainly supported by investment returns from BOCGI’s share of associate companies and a stable stream of interest and dividend income, although its combined ratio was above 100% over the past five years (2015 to 2019). The underwriting losses were mainly due to unfavourable technical results from the competitive motor and general liability lines in the Hong Kong direct insurance market. In 2020, the company conducted a portfolio review exercise and trimmed its non-performing books and channels. While future premium growth is expected to be steered by direct and inward property reinsurance business, AM Best views the inward property book’s catastrophe exposures as potentially adding volatility to the company’s overall underwriting performance.
BOCGI ranks as the sixth largest insurer in Hong Kong’s non-life market, based on a 3.4% share of direct premium written in 2019. The company’s underwriting portfolio is composed of a diversified direct insurance book and growing inward facultative and treaty business, which accounted for approximately a third of the overall portfolio in 2019. BOCGI sources business through various distribution channels, although its banking parent’s extensive branch network provides a stable source of profitable business.
Negative rating actions could occur if the company experiences a material deterioration in its risk-adjusted capitalisation or its operating profitability.
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 Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.Copyright © 2020 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/20201030005514/en/ContactPaul LamFinancial Analyst+852 2827 3402paul.lam@ambest.comChristopher SharkeyManager, Public Relations+1 908 439 2200, ext. 5159christopher.sharkey@ambest.comJames ChanAssociate Director+852 2827 3418james.chan@ambest.comJim PeavyDirector, Communications+1 908 439 2200, ext. 5644james.peavy@ambest.comSource : AM Best
--BERNAMA 
