Market Overview

A.M. Best Affirms Credit Ratings of China BOCOM Insurance Company Limited


A.M. Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of "a-" of China
BOCOM Insurance Company Limited (CBIC) (Hong Kong). The outlook of these
Credit Ratings (ratings) is stable.

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

CBIC's risk-adjusted capitalization, as measured by Best's Capital
Adequacy Ratio (BCAR), remains at the strongest level and is attributed
in part to the company's low underwriting leverage. Capital and surplus
grew steadily and organically in the past five years, underpinned by
strong investment results and full retention of operating profits. As a
wholly owned subsidiary and the sole Hong Kong general insurance arm of
Bank of Communications Co., Ltd. (BOCOM), a large state-owned banking
group in China, CBIC receives extensive business development and
distribution support from the group's banking network in Hong Kong,
mainland China, and overseas. It also receives a wide range of support
from its parent in terms of brand recognition, investment, risk
management, operations and capital support.

An offsetting rating factor is CBIC's high operating expense ratio,
historically and prospectively, in light of growing management expense
pressure versus a small and flat net premium base. The company is
exposed to credit risk and liquidity risk, as well as country
concentration risk in its investment portfolio, which consists primarily
of fixed income investment in China state-owned enterprises and contains
a material portion of non-rated bonds. In addition, the competitive
conditions in Hong Kong's general insurance market remain a continuing
challenge to CBIC's underwriting profitability and business development.

Positive rating actions could occur if CBIC demonstrates significant
improvement in its market position while maintaining a stable and
profitable operating performance. Negative rating actions could occur if
there is material deterioration in its operating performance or if the
support from BOCOM weakens notably.

Ratings are communicated to rated entities prior to publication.
Unless stated otherwise, the ratings were not amended subsequent to that

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

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