Categories: Wire Stories

AM Best Revises Under Review Status to Negative for Credit Ratings of Hotai Insurance Co., Ltd.

HONG KONG–(BUSINESS WIRE)–#insuranceAM Best has revised the implications of the under review status to negative from developing for the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of �bbb” (Good) of Hotai Insurance Co., Ltd. (Hotai Insurance) (Taiwan).

The Credit Ratings (ratings) reflect Hotai Insurance’s balance sheet strength, which AM Best assesses as weak, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management. The ratings also reflect the support that the company receives from its ultimate parent, Ho Tai Motor Co., Ltd. (Ho Tai Motor).

The ratings were placed under review with developing implications on 2 December 2022 pending increased visibility of the pandemic insurance ultimate loss level and the magnitude of capital impact, as well as the level and timeliness of financial support from the parent. The revision of the implications of the under review in this rating action reflects the larger-than-expected shortfall between the latest development of ultimate claims amount and potential further capital support from the parent, Ho Tai Motor, based on information provided by Hotai Insurance. With a significantly downsized capital and surplus to support the growing underwriting portfolio, AM Best expects the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at the very weak level over the short to intermediate term.

The local regulator announced that effective from 20 March 2023, only infections that exhibit moderate to severe symptoms are qualified as pandemic cases. AM Best expects this will help to partially alleviate the claims pressure faced by Hotai Insurance, albeit the magnitude remains uncertain.

AM Best will continue to hold discussions with Hotai Insurance’s management team on claims development, contingency capital and business plans to assess the impact to the company’s credit profile.

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

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

James Chan
Associate Director, Analytics
+852 2827 3418
james.chan@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Christie Lee
Senior Director, Analytics
+852 2827 3413
christie.lee@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098
al.slavin@ambest.com

Alex

Recent Posts

The Top 10 Best Places to Work in Egypt for 2024 revealed

CAIRO, EGYPT - Media OutReach Newswire - 23 December 2024 - Eand, Novo Nordisk, BSH,…

56 minutes ago

Trend Micro Named a Magic Quadrant Leader for Email Security Platforms

Trend Vision One™ – Email and Collaboration Security is a critical part of Trend’s centralized…

2 hours ago

Hollywood’s Style Icon Zendaya Makes Her Stunning Wax Debut at Madame Tussauds Singapore

SINGAPORE - Media OutReach Newswire - 23 December 2024 - Madame Tussauds Singapore is proud…

3 hours ago

Star-Studded Christmas Music Gala Lights Up the Stage

TAIPEI, TAIWAN - Media OutReach Newswire - 23 December 2024 – The 2024 Christmasland in…

7 hours ago

Graphisoft Strengthens Presence in Southeast Asia Amid BIM Demand Surge

Hungarian-based technology leader underscores its commitment to education, sustainability, and innovation SINGAPORE - Media OutReach…

8 hours ago