The 'A+' insurer financial strength and counterparty credit ratings on Hang Seng Insurance Co. Ltd. (Hang Seng Insurance) were affirmed on Aug. 25, 2004. The outlook is stable. The ratings reflect the company's good operating performance, strong capitalization, and high liquidity as well as the advantages it derives from its status as a wholly owned subsidiary of Hang Seng Bank Ltd. (Api/--/--). These positive factors are, however, moderated by a recent softening of premium rates. Hang Seng Insurance's parent, Hang Seng Bank Ltd., is 62.14% owned by Hongkong&Shanghai Banking Corp. Ltd. (foreign currency: A+/Stable/A-1; local currency: AA-/Stable/A-1+). Together with its sister company, Hang Seng Life Ltd. (A+/Stable/--), Hang Seng Insurance forms the insurance arm of Hang Seng Bank
