AM Best Affirms Credit Ratings of Sun Hung Kai Properties Insurance Limited

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Sun Hung Kai Properties Insurance Limited (SHKPI) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect SHKPI’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The very strong balance sheet strength assessment of SHKPI is underpinned by its risk-adjusted capitalisation, which was at the strongest level in fiscal year-end 30 June 2025 (FY2025), as measured by Best’s Capital Adequacy Ratio (BCAR). The company has been reducing its exposure on high-risk investment classes, including real estate sector bonds and loans securities, while applying a more prudent investment strategy that focuses on cash and high-grade fixed income assets. In light of SHKPI’s prudent investment strategy, AM Best considers its capital level a sufficient buffer to absorb investment risks. Other supporting factors include the company’s strong liquidity position, healthy solvency ratio and appropriate reinsurance programme. Partially offsetting factors include SHKPI’s modest capital and surplus level, relatively high dependency on reinsurance and its investment concentration in real estate properties.

SHKPI has consistently maintained a strong operating performance over the past decade. Despite a lower profit in 2025, driven by less underwriting and investment income, the company achieved a return-on-equity ratio of 9.9%. The company continues to benefit from its group-related business with better quality and minimal acquisition expenses, leading to underwriting results that continuously outperform the market. AM Best also expects the company’s investment performance to stabilize in the short to medium term, supported by a stable stream of interest and dividend income.

AM Best assesses SHKPI’s business profile as neutral. SHKPI is a wholly owned subsidiary of Sun Hung Kai Properties Limited, one of the largest property development and investment conglomerates in Hong Kong. Despite holding a modest share of Hong Kong’s general insurance segment, SHKPI managed to maintain its market position in a profitable manner largely attributable to its group-related businesses. With a focus on commercial business and employees’ compensation insurance, SHKPI benefits from its parental network to write a major part of its business from associated and subsidiary companies, and it continues to operate in a low acquisition cost business model.

Negative rating actions could occur if there is a significant deterioration in SHKPI’s operating performance. Negative rating actions also could arise if there is a material deterioration in SHKPI's risk-adjusted capitalisation, for example, due to material investment losses. Although it is unlikely in the near term, positive rating actions could arise if there is significant improvement in SHKPI's risk-adjusted capitalisation, for example, due to further improvements in its asset quality and capital size.

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.

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