AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of 'a-' (Excellent) of
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect China P&I's 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.
AM Best expects China P&I's risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), to remain at the strongest level over the short to intermediate term, underpinned by continued growth through full earnings retention and its very low underwriting leverage. The Club's consolidated capital and surplus declined moderately in 2022, mainly due to the impact of the
China P&I has consistently reported net profit over the past five years, underpinned by favourable investment results from the sizeable investment portfolio despite being partially offset by underwriting losses. According to AM Best's calculations, the Club's five-year average return-on-equity ratio was 5.8%, which compares favourably against its
Established in 1984 as a mutual association, China P&I has become a leading player in
Negative rating actions may occur if the Club's balance sheet strength level no longer supports the current assessment; for example, due to material deterioration in the level of risk-adjusted capitalisation arising from heightened investment risk. Negative rating actions may also occur if the Club's operating performance demonstrates a sustained and material deteriorating trend; for example, due to continued adverse investment results that significantly become a drag on overall profitability and erode the Club's capital position. While unlikely over the short term, positive rating actions may occur if China P&I's balance sheet strength demonstrates material improvement as the capital position (excluding the long-term equity investment in CMBC) gradually strengthens from earnings retention while the risk-adjusted capitalisation maintains at the strongest level.
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 AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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