SAIC Captive faces early underwriting losses

AM Best expects profitability within five years of launch.

AM Best has warned that SAIC Motor Insurance Limited (SAIC Captive) is likely to face underwriting losses in its early years as it absorbs start-up costs, although the rating agency expects the insurer to return to profitability within its first five years of operation.

The insurer expects investment income to be the main contributor to earnings during this period, supporting an average mid-to-low single-digit return on capital and surplus over the next five years.

AM Best said the company also faces operational and business execution risks as a newly established insurer. 

However, it considers these risks manageable, citing the management team's experience, underwriting expertise and access to data from its core business lines.

SAIC Captive was incorporated in Hong Kong in 2025 as the captive insurer of SAIC Motor Corporation Limited, China's largest state-owned vehicle manufacturer. 

Despite the early-stage risks, AM Best said SAIC Captive's balance sheet strength remains very strong. 

The assessment is supported by its initial capital of $49m, low underwriting leverage, a prudent investment portfolio, strong liquidity and reinsurance arrangements.

The rating agency expects the insurer's risk-adjusted capitalisation, measured by Best's Capital Adequacy Ratio (BCAR), to remain at the strongest level throughout its initial five-year business plan covering 2026 to 2030.