AM Best upgrades Taiping Re

Rating agency AM Best has upgraded the financial strength rating and issuer credit rating of Taiping Reinsurance Company.

Taiping Re’s financial strength rating was upgraded to A (Excellent) from A- (Excellent) and its issuer credit rating to ‘a’ from ‘a-’. The outlook for both ratings is stable.

AM Best said the ratings reflected the reinsurers improvement in capitalisation and underwriting performance. It added that the ratings acknowledge the support Taiping Re receives from its parent, China Taiping Insurance Holdings Company, in terms of capital contribution and operational support.

Offsetting these positive rating factors is the competitive reinsurance market in the Asia-Pacific region.

“Competition from existing reinsurers and new entrants continues to squeeze the underwriting profit margins of reinsurance business from Asian markets. Any future major catastrophe events can potentially impact TPRe’s underwriting results and capitalisation,” said the rating agency.

“To support its business development in different markets and lines of business, TPRe needs to continuously strengthen its catastrophe risk management and enterprise risk management capabilities.”