A.M. Best affirms ratings of China Re

A.M. Best has affirmed the financial strength rating of A and the issuer credit rating of “a” of China Reinsurance (Group) Corporation and its members, China Property & Casualty Reinsurance Company Ltd. (China Re P&C), China Life Reinsurance Company Ltd. (China Re Life), and China Continent Property & Casualty Insurance Company Ltd. (CCIC). The outlook for all these ratings is stable.

All companies are domiciled in China.The ratings of China Re, China Re P&C, China Re Life and CCIC (collectively known as China Re Group) reflect the group’s strong consolidated risk-adjusted capitalisation, prominent profile in China’s reinsurance market and profitable operating results.

The ratings of China Re Group, also reflect their strategic importance to the group’s business strategies, their full integration into the group’s operations and management and the ongoing capital support received from the group.

China Re Group’s consolidated capital and surplus have recorded healthy organic growth in the past five years, supported by its consistent operating profits. As of December 2014, the group’s consolidated capital and surplus stood at CNY54.6 billion (approximately USD 8.8 billion).

China Re Group’s consolidated operating results have been favorable in the past five years. The improved return on equity in the past two years is mainly driven by the strong investment performance. With its diversified insurance and reinsurance business mix, the group has been able to record stable underwriting profits on a consolidated basis over the past five years.

Partially offsetting these factors are China Re Group’s losses from the Tianjin blast in August 2015. Based on the group’s initial estimates, the pre-tax financial impact to the entire group amounted from CNY900 million to CNY1.1 billion.