กรุงเทพฯ--16 ก.ค.--Standard & Poor's
HONG KONG (Standard & Poor's) July 16, 2014--July 16, 2014, Standard & Poor's Ratings Services affirmed its 'A-' long-term local currency insurer financial strength and issuer credit ratings on FWD Life Insurance Co. (Bermuda) Ltd. (FWD Life HK).
The outlook is stable. At the same time, we affirmed our 'cnAA' long-term Greater China regional scale rating on the Hong Kong-based life insurance company. "We affirmed the ratings because we expect FWD Life HK to maintain its adequate competitive position and very strong capital and earnings over the next two years.
We view FWD Life HK as an insulated subsidiary of FWD Ltd. (unrated), and therefore rate the subsidiary based on its stand-alone credit profile (SACP) of 'a-', which is one notch higher than FWD Ltd.'s group credit profile of 'bbb+'," said Standard & Poor's credit analyst Anna Kong. We expect the Hong Kong insurance regulator to require FWD Life HK to maintain its capital strength at a level commensurate with its SACP. We also believe that FWD Ltd. has a compelling economic incentive to preserve FWD Life HK's credit strength.
FWD's bancassurance partners require FWD Life HK to maintain a strong credit profile. FWD Life HK generates more than half of its business through bancassurance. In our view, FWD Life HK's financial performance and funding are highly independent of other parts of the group. Our assessment on FWD Life HK's SACP reflects our view that the insurer will maintain its adequate competitive position and its marketing campaign continues after the rebranding and change of ownership in 2013. We also anticipate that FWD Life HK will maintain its very strong capital and earnings with high profit retention and embedded value generation, largely meeting its capital needs amid continuous growth. We continue to assess the insurer's business risk profile as satisfactory and financial risk profile as very strong. We consider FWD Life HK to be core subsidiary of FWD Ltd.
The insurer is the dominant core operating company within the group and accounts for the majority of the group's assets, equity, and profit "The stable outlook reflects our view that FWD Life HK will remain insulated from the group, and maintain its adequate competitive position and very strong capital and earnings over the next two years. We also expect the parent to maintain its current group credit profile over the next two years," said Ms. Kong.