Kuala Lumpur: Global credit rating agency, AM Best has affirmed Hong Kong’s Sun Hung Kai Properties Insurance Limited (SHKPI) financial strength rating of A (Excellent) and the long-term issuer credit rating of ‘a’ (Excellent), with a stable outlook.

According to BERNAMA News Agency, the credit ratings reflect SHKPI’s balance sheet strength, assessed as very strong, along with its robust operating performance, neutral business profile, and appropriate enterprise risk management. SHKPI’s solid balance sheet is supported by its risk-adjusted capitalisation, which peaked in the fiscal year ending June 30, 2024 (FY2024), as measured by Best’s Capital Adequacy Ratio.

The company has increased its investments in cash and cash equivalents and has improved the quality of its bond portfolio by reducing its exposure to China’s real estate sector. AM Best believes that SHKPI’s capital level is adequate to absorb investment risks, aided by strong liquidity, a healthy solvency ratio, and a well-structured reinsurance programme.

SHKPI has demonstrated consistent strong operating performance, largely due to superior underwriting profitability in comparison to industry peers. In FY2024, its double-digit return-on-equity ratio resulted from favourable underwriting experience and improved investment performance. Higher interest rates have further enhanced SHKPI’s investment returns, and the company continues to benefit from low acquisition costs due to its affiliation with Sun Hung Kai Properties Limited (SHKP).

As a wholly owned subsidiary of SHKP, one of Hong Kong’s largest property developers, SHKPI focuses on commercial and employees’ compensation insurance. Despite holding a modest share of Hong Kong’s general insurance market, the company remains profitable, largely due to its group-related businesses.