Taiping Reinsurance continues its expansion; earns stable rating

AM Best has affirmed the Financial Strength Rating of A (Excellent) of Taiping Reinsurance Company (TPRe) (Hong Kong) and its wholly-owned subsidiary, Taiping Reinsurance (China) Company. The outlook of the ratings is stable.

AM Best noted the reinsurer now has a strong foothold in the Greater China region and maintains a leading position in the non-life reinsurance markets in Hong Kong and Macau. The company continues its expansion across different markets, with a strategic focus on emerging markets such as Southeast Asia. AM Best flagged the fact that TPRe has partnered with its strategic investor, Ageas, on product development and reinsurance arrangements.

“The ratings of TPRe reflect its balance sheet strength.”

AM Best said the ratings of TPRe reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also acknowledge the continued implicit and explicit support given by TPRe’s parent company, China Taiping Insurance Holdings Company, in terms of capital, investment, risk oversight and shared operational resources.

TPRe’s risk-adjusted capitalisation remained at the strongest level at year-end 2023, as measured by Best’s Capital Adequacy Ratio. Over the short to intermediate term, AM Best expects TPRe’s risk-adjusted capitalisation to remain at the strongest level, supported by a good level of financial flexibility and continued improvement in the credit profile of its investment portfolio. Offsetting factors to the reinsurer’s balance sheet strength assessment include its exposure to potential catastrophe losses and deterioration in asset quality stemming from legacy investments amid volatile capital market conditions.

TPRe reported a net profit of HK$333 million in 2023, with a return on equity ratio of 3 percent under HKFRS 17. The non-life insurance service results have remained stable owing to the performance of property lines, with a combined ratio of 95.9 percent (as calculated by AM Best). 

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