S&P Global Ratings affirmed Blue Cross (Asia-Pacific) Insurance’s long-term issuer credit and financial strength ratings at ‘A+’, with a stable outlook.
The affirmation follows the recent publication of revised criteria for assessing insurers’ risk-based capital on 15 Nov 2023. S&P said the revised capital model criteria, designed to evaluate insurers’ risk-based capital adequacy, have not materially affected the financial outlook for Blue Cross.
Blue Cross is a General Insurance subsidiary of Hong Kong-headquartered insurer AIA Group and provides a range of insurance products, including health, travel, and motor.
“We continue to assess Blue Cross as a strategically important subsidiary of AIA,” S&P Global Ratings, highlighting the long-term commitment of the parent company to Blue Cross.
The rating agency highlighted Blue Cross’ strong capital and earnings projection through 2025, with an improved capital buffer at the 99.99% confidence level for extreme stress, thanks to a more explicit recognition of diversification benefits within the revised capital adequacy framework.
However, the firm’s modest capital size could make it susceptible to volatility from significant single-event risks. Despite this, S&P Global Ratings anticipates that Blue Cross will maintain its competitive position and healthy capital buffers, supporting the insurer’s operational performance amid the expansion of its health and GI business.
Looking ahead, Blue Cross is poised to maintain its competitive edge with robust capital buffers, even as it expands its health and property/casualty insurance business. However, any potential weakening in its strategic relationship with AIA or a significant downturn in profitability could prompt a reassessment of its ratings.
For now, S&P said that a change in rating within the next two years seems unlikely.
