A.M. Best Affirms Ratings of Fortis Insurance Company (Asia) Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Fortis Insurance Company (Asia) Limited (FICA FICA abbr. Federal Insurance Contributions Act Noun 1. FICA - a tax on employees and employers that is used to fund the Social Security system income tax - a personal tax levied on annual income ) (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 for both ratings is stable. The ratings reflect FICA's solid risk-based capitalization, stable underwriting performance and continued premium growth of in-force and new business for individual life portfolios. The ratings also acknowledge the improvement in financial leverage and the company's initiative in reducing the risk of assets. FICA's solid risk-adjusted capitalization in 2008, as measured by 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. ), was supported by the 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. 779 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. 100 million) through the issuance of preference shares, unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. from available-for-sale investments and lower asset risks as a result of the reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of invested assets from equities and mutual funds to bond investments during the year. The company consistently achieved a sound underwriting experience over the past five years. The actual claims of FICA's life portfolio have been comparably lower than the mortality experience assumed. Morbidity risk also remained favorable as compared to the expected claim experience. However, FICA's LIMRA LIMRA Life Insurance and Market Research Association (now LIMRA International, Inc.) 13-month persistency rate for the whole portfolio slightly deteriorated to 85.8% in 2008 from 89.6% in 2007. FICA improved its market presence in 2008. The sustainable growth of FICA's non-linked individual business contributed to the company's in-force premiums; however, there was a slight deterioration of the individual linked business during the year. These factors are partially offset by FICA's declined investment earnings. In light of the current financial crisis, FICA's net investment income dropped sharply from HKD 1.476 billion (USD 189.2 million) in 2007 to HKD -1.076 billion (USD -137.9 million) in 2008. These declines were attributed to the investment losses of HKD 1.136 billion (USD 145.7 million) from FICA's linked business, which were fully borne by the policyholders. Nonetheless, as a result of the asset reallocation in 2008, FICA is expected to produce a more stable investment yield from its bond investments going forward. Additionally, given a slower market growth as a result of the economic downturn in Hong Kong, A.M. Best expects ongoing market competition will remain to be a challenge for FICA to sustain its business growth in the near term. For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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