A.M. Best Asia-Pacific Limited has affirmed the financial
strength rating of A- (Excellent) and issuer credit rating of "a-" of SHC
Insurance Pte. Ltd. (SHC Insurance) (Singapore). The outlook for
both ratings is stable.
The ratings reflect SHC Insurance's adequate risk-based capitalization,
favorable operating performance and sound risk management practices.
SHC Insurance's capital and surplus has been growing over the past five
years due to its consistently favorable results from both underwriting
and investments. With its forecasted business growth, the company's
risk-adjusted capitalization, as measured by Best's Capital Adequacy
Ratio (BCAR), is expected to remain adequate in the near term.
SHC Insurance has a good track record of favorable operating results,
with its overall five-year average combined ratio remaining below 90%.
This can be attributed to the company's initiatives to enhance
underwriting profitability, such as pricing adjustments, monitoring
underwriting performance and improving employee productivity.
SHC Insurance's conservative invstment strategy continues to generate
stable income. Starting from 2013, the company's investment framework
was further enhanced through stringent guidelines for debt securities.
Offsetting rating factors include the potential pressure on SHC
Insurance's risk-adjusted capitalization from future dividend payouts
and its possible future acquisition and business expansion activities.
Another offsetting factor is the challenge the company faces to further
enhance its profile in the competitive Singapore non-life insurance
SHC Insurance is well positioned at its current rating level. Negative
rating actions could occur if there is deterioration in the company's
underwriting performance or significant erosion in its capitalization
The methodology used in determining these interactive ratings is Best's
Credit Rating Methodology, which provides a comprehensive explanation of
A.M. Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
Ratings are communicated to rated entities prior to publication, and
unless stated otherwise, the ratings were not amended subsequent to that
A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best
Company. A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS
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