Research Update: China Pacific Insurance Co. (H.K.) 'A-' Ratings Affirmed On Group Support Despite Capital Deterioration; Outlook Stable

Deteriorating earnings due to weakening investment markets and persistent underwriting losses will erode the prospective capital of China Pacific Insurance Co. (H.K.) Ltd. (CPIC HK). We revised downward our assessment of the insurer's capital and earnings to satisfactory from strong. Ongoing tightening of the investment mandate and underwriting standards by the Hong Kong-based insurer will likely moderate the drag on its earnings over the next two years. Consequently, we maintained our assessment of its stand-alone credit profile (SACP) at 'bbb'. CPIC HK should continue to benefit from parent support from China Pacific Insurance (Group) Co. Ltd. (CPIC Group), given its strategic importance to the group's long-term overseas strategy. We affirmed our 'A-' long-term financial strength rating and long-term issuer credit

...- Deteriorating earnings due to weakening investment markets and persistent underwriting losses will erode the prospective capital of China Pacific Insurance Co. (H.K.) Ltd. (CPIC HK). We revised downward our assessment of the insurer's capital and earnings to satisfactory from strong. - Ongoing tightening of the investment mandate and underwriting standards by the Hong Kong-based insurer will likely moderate the drag on its earnings over the next two years. Consequently, we maintained our assessment of its stand-alone credit profile (SACP) at '###'. - CPIC HK should continue to benefit from parent support from China Pacific Insurance (Group) Co. Ltd. (CPIC Group), given its strategic importance to the group's long-term overseas strategy. - We affirmed our 'A-' long-term financial strength rating and long-term issuer credit rating on CPIC HK. Group support provides two notches of rating uplift over our assessment of the SACP at '###'. - The stable outlook on CPIC HK reflects the outlook...

Research Update