HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Ping An Health Insurance Company of China, Ltd. (Ping An Health) (China). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Ping An Health’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the wide range of support the company receives from its two major shareholders, Ping An Insurance (Group) Company of China, Ltd. and Discovery Limited, in terms of financial flexibility, distribution channels and operations.
The capitalization of Ping An Health was strengthened in 2017 through two rounds of capital injection totaling CNY 850 million (approximately USD 128 million) from its shareholders. Furthermore, the company recorded its first net profit since launching, which can be attributed to the implementation of a new business plan that aims to transform the company’s product focus from group health to individual health gradually. A.M. Best expects the company will be able to successfully deliver the individual health-focused business plan and deliver the planned favorable results for the key individual product.
Offsetting rating factors include historical weak operating performance due to intense competition in the group health market and the execution risk of its new business plan, as well as the product concentration risk.
Positive rating actions could occur if Ping An Health can demonstrate continuous favorable operating results. Negative rating actions could occur if Ping An Health’s risk-adjusted capitalization weakens significantly, or if the company’s results materially deviate from its business plan. Negative rating actions also could occur if Ping An Insurance (Group) Company of China, Ltd. reduces the level of support to Ping An Health.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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