SHINKONG INSURANCE’S ISSUER CREDIT RATING OUTLOOK REVISED TO POSITIVE - AM BEST

KUALA LUMPUR, April 26 (Bernama) -- AM Best has revised the outlook to positive from stable for the long-term issuer credit rating (Long-Term ICR) and affirmed the financial strength rating (FSR) of A (Excellent) and the long-term ICR of “a” (Excellent) of Taiwan’s Shinkong Insurance Company Limited (Shinkong Insurance).

The outlook of the FSR is stable, according to the global credit rating agency in a statement.

The credit ratings (ratings) reflect Shinkong Insurance’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

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The positive long-term ICR outlook reflects the company’s consistently profitable operating performance amid a challenging operating environment over the past few years, partially attributed to the COVID-19 pandemic and capital market volatility.

Shinkong Insurance has benefitted from its prudent underwriting strategy, favourable claims experience and disciplined expense management, in addition to improved investment results in 2023 as interest and dividend income remained stable, while capital losses also shrank materially during the year.

Overall, the company’s underwriting profitability and return on equity have consistently outperformed the industry average over the past five years.

As measured by Best’s Capital Adequacy Ratio, Shinkong Insurance’s risk-adjusted capitalisation remains at the strongest level, with its capital and surplus recorded double-digit growth in 2023, mainly driven by positive operating results, despite being partially offset by a dividend payment.

The third-largest insurer in Taiwan’s non-life insurance market based on gross premiums written, Shinkong Insurance’s underwriting portfolio has been moderately diversified with a majority of its business in motor.

Positive rating actions could occur if Shinkong Insurance maintains its competitive strength and better operating profitability against its peers, while maintaining a very strong balance sheet strength assessment.

-- BERNAMA