KUALA LUMPUR, Nov 10 (Bernama) -- Global credit rating agency AM Best has affirmed China’s ZhongAn Online P&C Insurance Co Ltd (ZhongAn) Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent).
In a statement, AM Best said these credit ratings (ratings) which have a stable outlook, reflected ZhongAn’s balance sheet strength which was assessed as very strong, as well as its marginal operating performance, favourable business profile and appropriate enterprise risk management.
The very strong balance sheet strength assessment is underpinned by the company’s risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio, with its capital and surplus including minority interest reaching 17.03 billion Chinese yuan (US$2.46 billion), as of year-end 2022. (US$1=RM4.72)
AM Best assesses ZhongAn’s operating performance as marginal. The company’s non-life underwriting performance has been improving over the past five years, with stabilisation of its loss ratio and expense ratio in 2021 and 2022 and achieving underwriting profit for both years.
Going forward, AM Best expects the company’s earnings will continue to be subject to uncertainties arising from investment volatility, as well as the business execution risk and timeline in the turnaround strategies of the banking and technology segments.
The rating agency views ZhongAn’s business profile as favourable and as of 2022, the company maintained 1.6 per cent market share in terms of direct premium written and was ranked ninth in China’s non-life market.
ZhongAn is the first online-only non-life insurance company in China, in which AM Best views the company as an innovative industry leader, which provides solid support of the rating agency’s business profile assessment.
The company’s revenue from technology has achieved substantial growth over the years with an enlarging client base, and AM Best expects it to continue benefitting from its innovative capability and to integrate such capability into its insurance operations.
-- BERNAMA
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