China Reinsurance Group Corporation (China Re) and its subsidiaries have had their Financial Strength Rating (FSR) of A (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) affirmed by AM Best, with a stable outlook assigned.
According to the ratings agency, this affirmation has been driven by the balance sheet strength of China Re, which has been assessed as very strong, as well as its adequate operating performance, favourable business profile, and appropriate enterprise risk management.
China Re’s consolidated risk-adjusted capitalisation remained at the strongest level at the end of 2022, as measured by Best’s Capital Adequacy Ratio (BCAR).
The total capital and surplus declined by 7.3% to RMB94.7 billion or $13.7 billion as net profits were more than offset by an unfavourable decline in investment fair values and dividend payouts.
AM Best predicts that China Re’s capital position will return to moderate growth and remain supportive of its continued growth in underwriting and asset risks over the short to intermediate term.
The group has demonstrated good access to funding in the equity and debt capital markets, while its financial leverage remains at a low to moderate level, the investment portfolio mix was largely stable with good liquidity.
In terms of underwriting results, the company’s domestic property & casualty reinsurance segment continued to deliver a stable yet thin margin.