AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of 'a-' (Excellent) of
The Credit Ratings (ratings) reflect CMBWLI's balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and marginal enterprise risk management.
The revised outlooks to positive from stable reflect CMBWLI's improvement in investment risk control and governance, risk identification and monitoring tools, and risk quantification capability. AM Best expects the company's risk management framework to become more developed and better aligned with market practices, partially driven by regulatory initiatives to strengthen risk oversight and reporting.
CMBWLI's very strong balance sheet strength assessment is underpinned by its robust risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR). The company's capital continued to benefit from the positive operating results and full profit retention. Whilst CMBWLI maintains a conservative investment strategy in 2020 and continues to lower the proportion of unrated bonds, it plans to increase investments in equities significantly in coming years to enhance yields, whilst its BCAR over the forecast period is projected to stay at the strongest level.
CMBWLI's operating performance remains favourable. Its underwriting performance continues to outperform its domestic peers, whist the positive investment performance is supported by interest, dividend and rental income. The company is no longer negatively affected by investment impairments in 2020.
CMBWLI is a medium-sized non-life insurer in
Positive rating actions could occur if CMBWLI continues to demonstrate improvement in enterprise-wide risk management, whilst maintaining robust risk-adjusted capitalisation and a favourable operating performance. Negative rating actions could occur if the company's risk-adjusted capitalisation deteriorates materially due to adverse underwriting results or investment losses, or if the company's business profile notably weakens.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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