AM Best Affirms, Withdraws Blue Cross (Asia-Pacific) Insurance Credit Ratings

KUALA LUMPUR, Nov 30 (Bernama) -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Hong Kong’s Blue Cross (Asia-Pacific) Insurance Limited.

Concurrently, AM Best has withdrawn these ratings as the company requested to no longer participate in the rating agency’s interactive rating process.

AM Best in a statement said these credit ratings (ratings) which have a stable outlook reflected Blue Cross’s balance sheet strength, which was assessed as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

It also incorporates the rating enhancement that Blue Cross receives from its ultimate parent, AIA Group Limited (AIA).

Blue Cross’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, remained at the strongest level as of year-end 2022. The company’s balance sheet strength is supported by AIA’s capital support, a prudent investment strategy, strong liquidity, low reinsurance dependency and a debt-free balance sheet.

AM Best expects Blue Cross’s risk-adjusted capitalisation to remain supportive of the very strong balance sheet strength assessment over the short to intermediate term.

Meanwhile, the company’s operating result in 2022 was impacted negatively by a material one-off loss from discontinued operations and unfavourable investment results and going forward, it intends to expand its premium revenue at higher-than-average double-digit growth rates over the short to intermediate term.

Notwithstanding, AM Best expects Blue Cross’s earnings to remain marginal in 2022 and 2023, due to elevated levels of operating expenses stemming from integration with AIA, and considers the company’s operating performance to be commensurate with its adequate assessment, overall.

Leveraging its established franchise, in particular the medical insurance segment, Blue Cross is expected to play a strategic role in AIA’s integrated health strategy, in which the company continues to benefit from explicit and implicit support from AIA.

-- BERNAMA