MSIG to stay afloat in the next 2 years: S&P

MSIG HK is unlikely to be sold despite its small capital and earnings contributions. 

S&P Global Ratings perceived MSIG Insurance (Hong Kong) (MSIG HK) to maintain its highly strategic importance to the MS&AD Insurance group, supporting the group's overseas expansion strategy and servicing Japanese clients. 

MSIG HK is also expected to maintain profitable underwriting over the next two years, supported by improving underwriting expertise and restructured reinsurance arrangements. The insurer will continue to exercise sound risk and capital management to support its business growth. 

The insurer benefits from the group's underwriting expertise, investment management, actuarial services, reinsurance protection, cyber security, digital technology, and risk management. MSIG HK is unlikely to be sold despite its small capital and earnings contributions. 

The insurer had solid operating performance in 2023, with insurance revenue of HK$1.1b ($143m) and a net profit after tax of HK$82.8m ($10.764m). It paid HK$142.7m ($18.551m) in dividends in 2023 and is expected to continue upstreaming its entire earnings to the parent company over the next two years. 

Whilst MSIG HK is small in Hong Kong's fragmented property and casualty (P&C) insurance market, it is likely to maintain profitability through its stable Japan-related business and expansion of its local portfolio via multi-channel distribution. 

Growth areas include group medical, financial lines, and engineering insurance, leveraging its business relationships and underwriting capabilities.