Following revisions of criteria for assessing insurers’ risk-based capital last year, S&P Global Ratings on Thursday (30 May) affirmed MSIG Insurance Hong Kong’s (MSIG HK) ‘A+’ financial strength rating, with a stable outlook.
The affirmation reflects the insurer’s strategic importance to its parent company, Mitsui Sumitomo Insurance Co. Ltd. (MSI), which also holds an ‘A+’ rating with a stable outlook, S&P said.
MSIG HK reported a solid performance for the year ended 31 Dec 2023, with insurance revenue reaching HK$1.1bn (US$141m) and a net profit after tax of HK$82.8m. The insurer also paid dividends totalling HK$142.7m in 2023 and plans to continue upstreaming its entire earnings to the parent over the next two years.
Despite its small size in the fragmented Hong Kong property and casualty (P&C) insurance market, MSIG HK is expected to preserve profitability and expand its local portfolio. “Focus areas for growth include group medical, financial lines, and engineering insurance where MSIG HK can leverage its business relationships and underwriting capabilities,” S&P said.
Additionally, MSIG HK plays a crucial role in the MS&AD Insurance group’s strategy for overseas expansion, particularly in servicing Japanese clients. The insurer benefits significantly from the group’s support, which includes enhanced underwriting expertise, robust investment management, and advanced cyber security measures, among other services.
S&P Global Ratings concluded, “MSIG HK will maintain profitable underwriting over the next two years, in our view. Underpinning this will be the insurer’s improving underwriting expertise and restructured reinsurance arrangements,” adding that it anticipates the insurer will continue to exercise sound risk and capital management to support its business growth.
