A.M. Best Affirms Rating of Hang Seng Life Limited.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 24, 2003 A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of Hang Seng Hang Seng An index of the leading stocks on the Hong Kong stock market. Notes: The Hang Seng Index (HSI) comprises different stocks that are representative of the whole Hong Kong market. See also: DAX, Index, Nikkei, S&P 500 Life Limited, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. . The outlook is stable. The rating reflects Hang Seng Life's solid market position, robust new business growth and resilient earnings profile. The rating also considers the tremendous franchise value of the Hang Seng Bank Hang Seng Bank Limited (Traditional Chinese: 恒生銀行有限公司) HKSE: 0011 is the second largest bank in Hong Kong. It is a listed company but it is majority owned (62. , which directly owns 50% of the company. Hang Seng Life has maintained its respectable position in Hong Kong's life insurance market, with a 5.1% share of new individual life business in 2001. Hang Seng Bank's extensive personal banking coverage, coupled with the shared resources at HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) Life (International), has contributed to building the company's strong distribution capabilities. Total new business premiums increased by 84% in 2001, reflecting robust growth in both the ordinary life business and the pension business. The company's earnings profile has also remained resilient throughout the recent economic downturn. Return on equity for 2001 was maintained at 9.0%, compared to 16.8% for the previous year. Capital and surplus increased by over 106% in 2001, compared to a moderate increment of 18% in 2000, owing to a capital injection of HKD HKD In currencies, this is the abbreviation for the Hong Kong Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 80 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 10 million) over the year. The Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ), which measures capitalization on a risk-adjusted basis, indicates that its stand-alone financial strength has remained at a level commensurate to the current rating. Offsetting factors include adverse investment conditions expected in 2003, temporary negative spreads on traditional life policies and potential strain on capital driven by future premium growth. The investment returns on the ordinary life products and the shareholders' fund have declined as a result of depressed equity prices and low interest rates. For its traditional life policies, the company has maintained its policyholders' dividend at a level that is in line with its other competitors. Although this dividend level is not guaranteed, the company's spread on these policies will be impacted in the near term due to lower-than-assumed investment performance. In addition, the company's risk-adjusted capitalization is expected to be pressured by the robust business volume in 2003. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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