The ratings reflect Blue Cross’ strong risk-adjusted capitalization, favorable operating performance and strong business profile as one of the leading non-life insurers in the accident and health insurance market in
Blue Cross’ capitalization, as measured on a risk-adjusted and local solvency basis, is considered to be strong and is expected to provide continued support to the ongoing business operation and development.
The company has delivered positive operating results since 2009, mainly driven by stable and favorable claims experience in the company’s core accident and health business, as well as the consistently improving trend in expense controls. In terms of investment performance, the company benefited from a stable stream of interest and dividend income over the past five years, which has helped
Partially offsetting rating factors include the competitive operating environment and the inflationary trend in medical insurance. Moreover, the company’s relatively high dividends payout ratio may hinder the organic growth of the capital and surplus, and expose the capitalization to higher volatility arising from assets valuations.
Uncertainty in financial market conditions may also induce volatility in the company’s investment performance as the company gradually downsizes its life insurance fund in tandem with the life portfolio run-off.
Positive rating actions could occur if
Downward rating actions could occur if the company’s profitability or risk-adjusted capitalization were to significantly weaken.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This rating announcement has been issued by
Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
Associate Financial Analyst
Moungmo Lee, +852-2827-3402
Manager, Public Relations
Assistant Vice President, Public Relations
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