HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Fubon Insurance Co., Ltd. (Fubon) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.
The ratings of Fubon are based on its very strong balance sheet, track record of positive operating performance and favorable business profile. Fubon continues to demonstrate a strong risk-adjusted capitalization that is underpinned by its conservative underwriting leverage, prudent reinsurance strategy and reserving practice. Favorable earnings derived from underwriting and investments continue to support the company’s operating income, although the performance was impacted partially by operating losses from its China operations, as well as exchange-rate movements. Fubon has been the leader in Taiwan’s non-life insurance segment over the past three decades. As a wholly owned subsidiary of Fubon Financial Holdings Co., Ltd., the company continues to benefit from this in the areas of distribution, financial flexibility and investment management support.
Offsetting rating factors include Fubon’s geographical concentration in catastrophe-prone areas and increasingly competitive market conditions in Taiwan.
Positive rating actions could occur if Fubon’s operating performance remains strong, and its risk-adjusted capitalization strengthens. Negative rating actions could occur if there is significant deterioration in the company’s operating performance, or if there are material capital or dividend payouts that lead to a substantial decline in its risk-adjusted capitalization. Furthermore, the ratings could be impacted if the parent company’s credit profile deteriorates.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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