(Re)in Summary
- AM Best revised the outlooks on China BOCOM Insurance Company Limited to negative from stable.
- A concentrated unquoted investment has weakened the insurer’s balance sheet fundamentals, the ratings agency said.
- The Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” (Excellent) were both affirmed.
- High operating expenses against a small premium base, plus finance costs on a bank borrowing, tempered net profit.
A concentrated unquoted investment has weakened the balance sheet fundamentals of China BOCOM Insurance Company Limited (CBIC), prompting AM Best to revise the Hong Kong general insurer’s outlooks to negative, the agency said in a release on 11 Sep 2026. AM Best still assesses the balance sheet as very strong.
AM Best also affirmed CBIC’s Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” (Excellent), but revised the outlooks on both to negative from stable.
The agency said pressure on its balance sheet strength assessment drove the outlook change, with investment risk the major offsetting factor as unquoted investments grew.
On underwriting, AM Best said stringent underwriting and prudent risk selection kept CBIC’s loss ratio below the market average.
Despite the risk, CBIC’s risk-adjusted capitalisation remained at the strongest level at year-end 2025, as measured by Best’s Capital Adequacy Ratio (BCAR), AM Best said. The ratio nonetheless declined, on higher equity securities risk from the unquoted holdings.
Capital and surplus stayed stable and the insurer holds a robust regulatory solvency level under Hong Kong’s Risk-Based Capital regime, according to the agency. Financial leverage stood at 17.5% at the end of 2025 and liquidity was sufficient.
Stable investment income remains the cornerstone of the insurer’s profitable bottom line, the agency said, including steady interest income from listed debt securities and bank deposits.
Offsetting that, high operating expenses set against a small premium base weigh on the result, and finance costs arising from a bank borrowing partly temper net profit. AM Best assessed operating performance as adequate. Further negative rating action could follow if CBIC does not reduce its exposure to high-risk unquoted investments, the agency said.
CBIC holds a modest position in Hong Kong’s highly fragmented general insurance market. Its underwriting portfolio is diversified and it distributes through inward reinsurance, brokers, bancassurance, agencies and direct channels.
The company is the sole general insurance arm of the Bank of Communications Co., Ltd. (BOCOM) group, carries the BOCOM brand and draws distribution support from the group’s banking network and subsidiaries. AM Best said the ratings factor in support from the parent across distribution, corporate governance and brand recognition.
The revision follows AM Best’s affirmation of CBIC’s ratings in 2025, when the agency flagged the insurer’s appetite for unlisted equity investments alongside expense pressure on underwriting results, and an affirmation in 2024 on premium growth. CBIC was among the Hong Kong insurers covered in (Re)in Asia’s analysis of the market’s 2025 underwriting performance.
