AM Best affirms China’s Qianhai Reinsurance credit ratings

KUALA LUMPUR, Dec 19 (Bernama) -- United States-headquartered global credit rating agency, AM Best has affirmed China’s Qianhai Reinsurance Co Ltd’s (QHR) financial strength rating of A- (excellent) and the long-term issuer credit rating of “a-” (excellent).

The outlook for these credit ratings is stable, reflecting the credit rating agency’s assessment of QHR’s balance sheet strength (very strong), its operating performance (adequate), business profile (neutral) and enterprise risk management (appropriate).

In a statement today, AM Best said QHR’s risk-adjusted capitalisation remained at the strongest level as of end-2021, as measured by its Capital Adequacy Ratio. 

The company’s capital and surplus increased by 7.1 per cent to RMB3.3 billion in 2021, underpinned by full retention of net profit. (RMB100=RM63.33)

Going forward, AM Best expects the company to continue to receive financial support from its major shareholders and explore opportunities in capital markets to enrich its capital structure.

Other supportive factors to the balance sheet strength include the prudent retrocession arrangements and the diversified investment portfolio, focusing on cash and fixed-income securities, albeit with a moderate exposure to debt-type alternative investments.

The company extended its profitable trend in 2021 with a return on equity of 6.5 per cent, compared with the five-year (2017-2021) average of 2.1 per cent.

QHR, a composite reinsurer controlled by three Chinese state-owned enterprises, plays a strategic role in the development of the Qianhai Free Trade Zone, and has continued to strengthen its market presence over the past five years.

-- BERNAMA