A.M. Best Affirms Ratings of China BOCOM Insurance Company Limited

HONG KONG--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength ratings of A- (Excellent) and the issuer credit rating of “a-” of the China BOCOM Insurance Company Limited (CBIC) (Hong Kong). The outlook for both ratings is stable.

The ratings reflect CBIC’s strong risk-adjusted capitalization, consistently favorable loss experience and the various support it receives as a wholly owned subsidiary of Bank of Communications Co., Ltd. (BOCOM), one of the top five commercial banks in China.

As the only general insurance operation within the group, CBIC plays a strategic role in BOCOM. In addition to capital support, CBIC enjoys BOCOM’s brand name and extensive distribution network and receives operational support from BOCOM in terms of investment, business development, human resources and risk management.

CBIC’s risk-adjusted capitalization, as reflected by Best’s Capital Adequacy Ratio (BCAR), is strong and supportive of its current ratings. CBIC’s loss ratio has been consistently favorable, supported by the high quality insurance business book generated from the Hong Kong branch of BOCOM.

An offsetting rating factor is CBIC’s large amount of operating expenses relative to its premium size. Another offsetting rating factor is the company’s volatile historical investment performance. The company suffered sizable capital losses in 2008 and 2011 from its large exposure to equity and structured products.

Subsequent to these losses, CBIC has substantially reduced its allocations in higher risk investments and strengthened its investment risk management practice. The insurer’s investment results have stabilized since 2012.

Ratings are communicated to rated entities prior to publication, and 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 visit A.M. Best’s Ratings & Criteria Center.

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

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150901006352/en/

A.M. Best Company, Inc.
Yanwei You, +852-2827-3421
Financial Analyst
[email protected]
or
Ken Chow, +852-2827-3426
Senior Financial Analyst
[email protected]
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company, Inc.

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