HONG KONG–(BUSINESS WIRE)–AM Best affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) of Shinkong Insurance Company Limited (Shinkong Insurance) (Taiwan). The outlook for these Credit Ratings (ratings) is stable.
The ratings reflect Shinkong Insurance’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operational performance, neutral business profile and appropriate management of business risks.
Shinkong Insurance’s risk-adjusted capitalization remains at the highest level, as measured by Best’s capital adequacy ratio (BCAR). The company’s capital and surplus continued to grow organically in 2021, primarily through partial profit retention and the accumulation of special reserves. The company’s risk-based capital ratio is at a healthy level and above regulatory requirements with a good level of cushion. The company’s investment portfolio has been liquid and stable, with the majority of its investment assets held in cash and investment grade bonds. The company’s dependence on reinsurance remains moderate and is placed with panels of reinsurers of good credit quality.
Shinkong Insurance continued to be profitable in 2021, supported by positive underwriting and investment results. The company’s net combined ratio improved slightly in 2021, mainly due to a lower net claims ratio in its motor and casualty business, while the company’s overall net expense ratio remained stable . Shinkong Insurance’s investment portfolio continues to generate stable investment income to support its overall operating results.
Shinkong Insurance remains the third largest insurer in Taiwan’s non-life insurance market based on gross written premiums. The company’s underwriting portfolio has been moderately diversified, with a majority of its automotive business. Shinkong Insurance continued to refine its underwriting portfolio in 2021 with faster expansion in non-automotive product lines than in automotive business to achieve a more diversified underwriting portfolio. The distribution of the company remains stable and diversified; Shinkong Insurance uses both direct and affiliated insurance agency channels, with a good level of control to distribute its products.
While Shinkong Insurance is well positioned at its current rating level, negative rating actions could arise if the company exhibits a significant and sustained deterioration in its operating performance, or if there is a substantial decline in its risk-adjusted capitalization. .
Ratings are communicated to rated entities before publication. Unless otherwise indicated, the ratings have not been changed as a result of this 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 relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit AM Best’s Recent Rating Activity webpage. For more information on the use and limitations of credit rating opinions, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best’s Credit Scores, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see the Guide to Proper Use of Best’s Best ratings and reviews.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.