A.M. Best Affirms Ratings of Wing Lung Insurance Company Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Wing Lung Insurance Company Limited (WLI WLI Weblogic Integration (Bea Systems) WLI Weekly Leading Index WLI Whole Life Insurance WLI Buoy Tender, Inland (USCGC) WLI Work Load Indicator WLI World Learning Incorporated WLI Where Lines Intersect ) (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 on both ratings is stable. The ratings reflect WLI's adequate capitalization, consistent positive operating results and prudent investment portfolio. WLI's capital position remained solid in 2005. The company's capital and surplus increased to 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. 594 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. 76 million) in 2005 from HKD 518 million (USD 67 million) in 2004. 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. , which measures the capitalization on a risk-adjusted basis, demonstrates that WLI is adequately capitalized, although higher total asset risks due to increased investments in fixed income instruments Fixed income instruments Assets that pay a fixed dollar amount, such as bonds and preferred stock. and equities moderately weakened the company's risk-based capitalization in 2005. Despite the current softening market conditions, the company has consistently achieved positive operating results with an average combined ratio of 87% over the past five consecutive years. Retained profits from positive underwriting results and the improved investment return are expected to further enhance the company's capitalization in the near term. While WLI has increased its exposure to fixed income instruments and equities in 2005, the liquidity position of its investment portfolio remains strong. Cash and cash equivalent assets still represented about 42% of WLI's total assets in 2005. Stable investment yield from the prudent investment portfolio will continue to be the key contributor to the financial stability of the company. Offsetting these positive factors are a continued decline in the underwriting profitability of WLI's employees' compensation (E/C E/C Equipment/Component E/C Erik and Christine (Phantom of the Opera fan-fiction) E/C Engineering/Construction Contractor E/C Environment & Communications ) line and narrow spread of risk due to its heavy concentration in general liability business. WLI recorded an increase in the combined ratio of its E/C line from 102% in 2004 to 113% in 2005, further reflecting the deterioration of the underwriting profitability of this line. Given its heavy concentration on general liability business, the prevailing soft market environment along with intense market competition could potentially undermine the stability of its overall underwriting profitability going forward. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industries, including the banking and insurance sectors. For more information, visit www.ambest.com. |
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