China Taiping Macau rated ‘stable’

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U.S. based rating agency A.M. Best expects the outlook of China Taiping Insurance (Macau) Co., Ltd. to be stable, assigning an ‘A (Excellent)’ rating to the company’s financial strength and an ‘a’ for its long-term issuer credit.
The rating agency claimed in a press release that the ratings reflect that the local insurer’s risk-adjusted capitalisation is strong, in addition to its ‘consistently favourable operating performance and position’ as the leader of the local non-life insurance market.
‘CTIM’s risk-adjusted capitalization level, as reflected by Best’s Capital Adequacy Ratio (BCAR), remains strong and supportive of its ratings,’ the agency wrote.
‘Capital and surplus was strengthened primarily through retention of operating profits, which have been consistently strong due to favourable underwriting performance and profitable investment results,’ it explained.
The firm pointed out, however, that the insurer’s investment results due to market value fluctuations in fixed income securities and the anticipated slowdown in the market’s premium growth may offset rating factors.
‘Negative rating actions could occur if [China Taiping Macau] risk-adjusted capitalization weakens due to, for example, a larger than expected dividend payout or if the company’s operating results deteriorate materially due to investment impairments or other negative factors,’ the firm noted.
According to the official data of the Monetary Authority of Macau, China Taiping Macau led the city’s non-life insurance market, with total gross premiums accounting for 28.2 per cent of the market total as at the end of the third quarter of 2016. At MOP494.8 million (US$61.9 million), the company’s total gross premiums for the first three quarters of 2016 only represent a growth of 1.2 per cent from MOP488.96 million during the same period of 2015.