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A.M. Best Affirms Credit Ratings of Central Reinsurance Corporation

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A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of "a" of Central
Reinsurance Corporation
(Central Re) (Taiwan). The outlook of these
Credit Ratings (ratings) is stable.

The ratings reflect Central Re's balance sheet strength, which A.M. Best
categorizes as very strong, as well as its adequate operating
performance, favorable business profile and appropriate enterprise risk
management.

Central Re's risk-adjusted capitalization remained sound in 2017,
supported by retained earnings accumulation and a prudent and highly
liquid investment portfolio. The public company status also enhanced
Central Re's financial flexibility.

The company has demonstrated a favorable track record of underwriting
results over the past five years, underpinned by stable and strong
profitability in its life reinsurance segment and a generally stable
combined ratio in the domestic non-life reinsurance segment, as well as
a relatively benign catastrophe claims experience in its international
book of business over the past five years. Moreover, the company's large
investment asset allocation to cash and cash equivalents, and
fixed-income securities delivered a stable stream of interest income,
despite the yield remaining low.

Leveraging its long operating history as the sole domestic reinsurer in
Taiwan, Central Re has built solid and long-term relationships with
local life and non-life insurers. The company has maintained a strong
and stable market position and a diversified underwriting portfolio,
with a majority of the premium income sourced directly from cedants,
despite the geographic coverage remaining mainly in Taiwan.

Offsetting rating factors include potential volatility in earnings and
capital and surplus, arising from Central Re's catastrophe exposures.
The company has arranged a comprehensive retrocession program to
mitigate the undue risks. The sustained soft condition and increased
competition in the reinsurance market continue to post challenges to the
operating environment.

While positive rating actions are not likely in the near term, negative
rating actions could occur if the company experiences significant and
sustained deterioration in its operating performance, or if there is a
material adverse change in its risk-adjusted capitalization.

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 A.M. 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 A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit
www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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