China Taiping Insurance (Singapore) Pte. Ltd. (CTPIS) has been affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-". The outlook for both ratings is stable.

A.M. Best Affirms Ratings of China Taiping Insurance (Singapore) Pte. Ltd.

CONTACTS:
Angela Chow
Associate Financial Analyst
+852-2827-3407
angela.chow@ambest.com

Rachelle Morrow
Senior Manager, Public Relations
+(1) 908 439 2200, ext. 5378
rachelle.morrow@ambest.com

Jeff Yeung
Associate Director
+852-2827-3413
jeff.yeung@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
james.peavy@ambest.com

HONG KONG, MAY 30, 2013 A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of China Taiping Insurance (Singapore) Pte. Ltd. (CTIS) (Singapore). The outlook for both ratings is stable.

The ratings reflect CTIS’ solid risk-adjusted capitalization, stable underwriting performance and the operational support the company receives from China Taiping Insurance Group (HK) Company Limited in terms of investment, reinsurance and risk management.

CTIS's favorable operating and investment results in recent years have contributed to the growth in its capital base. CTIS’ risk-adjusted capitalization level as measured by Best’s Capital Adequacy Ratio (BCAR) improved in 2012 and is supportive of its current ratings. Given its modest business projections, the company’s risk-based capitalization is expected to remain solid in the near term.

CTIS’ underwriting performance has been stabilized since 2007. Due to management’s efforts, CTIS has managed to maintain its combined ratio at a five-year average of 85%. Motor remains the biggest line of business in CTIS’s portfolio; its performance has seen gradual improvement in the past three years, compared to years prior to 2009, but its high loss ratio remains a concern.

Partially offsetting these positive rating factors are the soft market conditions in Singapore as well as the potential volatile claims experience stemming from the work injury compensation (WIC) portfolio. WIC recorded a high loss ratio in 2012 partly attributed to the additional reserves established by CTIS with the intention to cushion any impact on rising compensation costs and the competitive market environment.

Future positive rating actions could occur if CTIS is able to maintain its solid capitalization, achieve sustained improvement in underwriting of key business lines and enhance its enterprise risk management framework.

Alternatively, negative rating actions could occur if CTIS’ operating performance deteriorates or there is a substantial decline in its risk-based capitalization level.

The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.

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