HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of The Oriental Insurance Company Limited (Oriental) (India). The outlook for both ratings is stable.
The ratings reflect Oriental’s strong risk-adjusted capitalization and consistently favorable investment performance.
Oriental continues to maintain strong risk-adjusted capitalization, as reflected by its Best’s Capital Adequacy Ratio (BCAR), which is adequate for its current rating level. The company has consistently produced favorable investment returns contributed by the interest and dividends income. The investment income significantly enhanced the overall operating performance.
Partially offsetting these positive rating factors are Oriental’s deteriorated underwriting performance and high equities investment risk.
Oriental’s overall underwriting results remained unsatisfactory in fiscal year 2014-15, attributing to the worsening loss experience in its health portfolio and the increasing cost in operation. Also, Oriental’s equity exposure remained high on a market value basis, with equity accounting for approximately half of the total investments. Adverse movement in the equity market could have a negative impact on Oriental’s operating results and capitalization level.
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