A.M. Best rates China´s COSCO SHIPPING outlook as stable

KUALA LUMPUR, Oct 8 (Bernama) -- A.M. Best has assigned a Financial Strength Rating of A (excellent) and a Long-Term Issuer Credit Rating of ‘a’ to COSCO SHIPPING Captive Insurance Co Ltd (COSCO SHIPPING Captive) China.

A.M. Best, a global rating agency and information provider focused on the insurance industry said in a statement the outlook assigned to these ratings is stable.

COSCO SHIPPING Captive is a newly incorporated pure captive of China COSCO SHIPPING Corporation Limited (COSCO SHIPPING).

According to the statement, the ratings reflect the company’s balance sheet strength, which A.M. Best said as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings also reflect the implicit and explicit support the company receives from its parent – A.M. Best perceives to benefit from strong government support. COSCO SHIPPING Captive’s very strong balance sheet strength is supported by a large initial injection of RMB 2 billion (US$307 million) in start-up capital and risk-adjusted capitalization is expected to remain at the strongest level, according to its business plan.

This is further supported by the company’s very low underwriting leverage relative to its peers, as well as its conservative, highly liquid investment portfolio.

The rating agency expects the company’s overall operating performance to remain adequate, mainly supported by low distribution costs and a stable stream of investment income that is significant in size compared with its net earned premium.

Headquartered in Shanghai, COSCO SHIPPING Captive mainly underwrites marine business for the group and its affiliates, as well as other risks stemming from COSCO SHIPPING’s operations including liability, property, cargo and group accident and health. More details at www.ambest.com -- BERNAMA