Dah Sing Insurance (DSI) reported a net profit of HKD 108 million (US$13.9m) in 2023 with favourable investment outcomes, due to improved capital market conditions, a key contributor, says AM Best.
The company’s underwriting performance also improved thanks to better control and risk selection in key business lines such as property damage and motor, the ratings agency added.
AM Best made the comments in a release affirming the Hong Kong insurer’s Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) for DSI, with a stable outlook.
“DSI’s risk-adjusted capitalisation remained at the strongest level at year-end 2023, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s reported capital and surplus under HKFRS 17 increased by 18% to HK$2.3bn in 2023, driven by net profit retention and a recovery in the valuation of equity investments measured at fair value through other comprehensive income,” says the rating agency.
DSI has a market share of approximately 1.2%, of Hong Kong’s non-life market, with total gross premiums written (GPW) reaching HKD 844 million in 2023, according to data from the Insurance Authority.
The company’s five major lines of business are motor, employees’ compensation, pecuniary loss, accident and health, and property damage and DSI is re-balancing its underwriting portfolio by expanding its property damage business while reducing catastrophe risk exposure of its offshore inward reinsurance portfolio, AM Best said.
A diversified panel of corporate intermediaries contributed a majority of the company’s GPW, followed by bancassurance supported by Dah Sing Bank, the ratings agency added.
The company also maintained a moderately high proportion, yet well-diversified equity investment portfolio. AM Best anticipates that DSI will apply strong investment selection and diversification methods, along with suitable investment controls, to manage the high investment risk exposure.
