KUALA LUMPUR, Dec 5 (Bernama) -- Taiwan’s Nan Shan General Insurance Co Ltd’s “A-” (Excellent) financial strength rating and “a-” (Excellent) long-term issuer credit rating remained unchanged, said rating agency AM Best.
In a statement, AM Best said this was based on its expectation of Nan Shan General’s business and capital plans over the short to intermediate term and in view of the negative impact from COVID-19 pandemic insurance claims on the company’s financials as of the end of September 2022.
It said that Nan Shan General’s reported capital and surplus declined by more than half during the first nine months of 2022 to NT$2.0 billion. (NT$100=RM14.33)
“The main drag was a net loss of NT$1.3 billion attributable to significant claims related to pandemic insurance products and negative changes in other comprehensive income due to unfavourable capital market conditions.
“Nonetheless, the company’s local solvency ratio remained above the regulatory minimum as of the end of September 2022,” it said.
AM Best said Nan Shan General also experienced material adverse claims arising from pandemic insurance products and has provisioned additional claims reserves in the third quarter of 2022 for its in-force pandemic products based on more conservative assumptions.
It said the company’s business scale is small within its parent, Nan Shan Life Insurance Co Ltd, but it benefitted from the distribution support from the parent’s life agency force in sourcing the majority of its premium revenue, in particular for personal line products such as voluntary motor.
Moreover, AM Best viewed the parent as resourceful and willing to provide explicit and implicit financial support to Nan Shan General when needed.
“AM Best will continue to closely monitor the pandemic insurance claims development and hold discussions with Nan Shan General’s management to evaluate any subsequent implications on the company’s rating fundamentals,” it added.
-- BERNAMA
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