AM Best Rates Excellent Credit Ratings For Hong Kong’s SAIC Captive
KUALA LUMPUR, June 12 (Bernama) -- Global credit rating agency, AM Best has assigned a financial strength rating of A- (Excellent) and a long-term issuer credit rating of “a-” (Excellent) to Hong Kong’s SAIC Motor Insurance Limited (SAIC Captive).
The outlook assigned to these credit ratings (ratings) is stable, reflecting SAIC Captive’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.
Established in 2025, SAIC Captive is a single-parent captive of SAIC Motor Corporation Limited (SAIC Motor), the largest state-owned motor manufacturer in China, and serves as its dedicated risk management and insurance arm.
According to AM Best in a statement, SAIC Motor is majority owned by Shanghai Automotive Industry (Group) Co Ltd (SAIC Group), the ultimate parent, which is wholly owned by the Shanghai municipal government.
During its start-up phase, SAIC Captive is primarily focused on underwriting individual motor liabilities for SAIC Motor-produced vehicles, including motor extended warranty, product replacement coverage and expense reimbursement insurance, while prudently retaining group-related commercial risks.
AM Best said SAIC Captive's very strong balance sheet strength assessment is supported by its initial capital of US$49 million and risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio, which is projected to remain at the strongest level under its initial five-year plan from 2026 to 2030. (US$1=RM4.05)
The credit rating agency attributed this to low underwriting leverage, a prudent investment portfolio, strong liquidity and appropriate reinsurance arrangements.
SAIC Captive projects moderate underwriting losses during its early years due to start-up expenses but expects a turnaround within the first five years of operation. The company also expects its bottom line to be supported largely by investment income, generating an average mid- to low-single-digit return on capital and surplus over the next five years.
AM Best said SAIC Captive's operational and business execution risks are manageable and are partially offset by the company's management experience, underwriting expertise and accumulated data from its key business lines.
-- BERNAMA