Hong Leong’s underwriting profitability to continue

Its shift toward fixed-income securities is expected to reduce volatility.

Hong Leong Insurance (Asia) Limited’s (HLIA) balance sheet remains strong, supported by the highest level of risk-adjusted capitalisation as of the fiscal year ending 30 June 2024 (FY 2024), AM Best said.

The company has sustained moderate capital and surplus growth whilst keeping underwriting leverage low. 

It also maintains a healthy solvency ratio above regulatory requirements. However, its reliance on reinsurance and a concentration of investments in real estate remain factors to monitor.  

AM Best expects HLIA’s strong underwriting profitability to continue, driven by double-digit growth in gross premiums written in FY 2024. 

This has been supported by a recovery in domestic helper and travel insurance. 

The company is also focusing on operational efficiency improvements, which should help stabilise its expense ratio and contribute to higher underwriting margins.  

On the investment side, HLIA’s shift toward fixed-income securities is expected to reduce volatility compared to past exposure to listed equities.  

HLIA’s business profile remains modest in Hong Kong’s general insurance market, though it has been expanding into commercial lines through broker channels.