AM Best Affirms Credit Ratings of United Overseas Insurance Limited
01 Agosto 2024 - 10:17AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A+
(Superior) and the Long-Term Issuer Credit Rating of “aa-”
(Superior) of United Overseas Insurance Limited (UOI) (Singapore).
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect UOI’s balance sheet strength, which AM Best
assesses as very strong, as well as its very strong operating
performance, neutral business profile and appropriate enterprise
risk management. In addition, UOI’s ratings factor in rating
enhancement from the company’s ultimate majority ownership by, and
importance to, United Overseas Bank Limited (UOB), a leading
banking corporation in Asia.
UOI’s balance sheet strength assessment is underpinned by its
risk-adjusted capitalisation, which is expected to remain
comfortably at the strongest level over the medium term, as
measured by Best’s Capital Adequacy Ratio (BCAR). UOI has
demonstrated good internal capital generation over time. The
company’s shareholders' equity increased by 5.9% in 2023 due to
unrealised investment gains and its good internal capital
generation. AM Best views UOI’s investment portfolio to have
moderate risk, comprising mainly high-quality fixed-income
securities, cash and deposits, albeit with a moderate exposure to
equity investments. A partially offsetting balance sheet strength
factor remains the company’s reliance on reinsurance usage, which
enables the underwriting of large limit risks. Nonetheless, AM Best
views the company’s reinsurance management strategy as appropriate
to mitigate balance sheet volatility arising from large loss and
catastrophe losses, and its credit risk is mitigated by a
reinsurance panel that consists of well-rated counterparties.
AM Best views the company’s operating performance as very
strong, supported by exceptionally strong and consistent
underwriting results, which have led to highly stable overall
earnings over time. Overall net profit increased by 55% in 2023,
primarily due to better investment returns. UOI’s underwriting
performance remained highly profitable in 2023 given its low loss
ratio and favourable reinsurance commissions. The company’s
investment returns remain favourable and are an important
contributor to overall earnings.
As the sole insurance subsidiary of UOB, UOI benefits from
cross-selling insurance policies to UOB customers. The company’s
affiliation with its banking parent enables good access to business
through the bancassurance channel. UOI’s underwriting portfolio
remains focused predominantly in Singapore, whereby approximately
three quarters of gross premium is sourced locally. Regional
business expansion over the medium term is expected to be aligned
with opportunities arising in connection with the group’s
strategy.
Ratings are communicated to rated entities prior to
publication. Unless stated otherwise, the ratings were not amended
subsequent to that communication.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801197504/en/
Susan Tan Financial Analyst +65 6303 5023
susan.tan@ambest.com
Chris Lim, FCII, CFA Associate Director, Analytics
+65 6303 5018 chris.lim@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com