Stable investment income shields HLIA against market volatility, driving fiscal optimism

The insurer carries a strong balance sheet, operating performance, limited profile, and appropriate risk management.

Hong Leong Insurance (Asia) (HLIA) is seen to “benefit” from solid growth momentum from improved operational efficiency, boosting underwriting margin and higher earnings amidst portfolio growth, said AM Best.

The ratings are based on HLIA's very strong balance sheet, strong operating performance, limited business profile, and appropriate enterprise risk management.

The company's balance sheet strength is supported by its highest level risk-adjusted capitalization and low underwriting leverage, although it faces challenges like modest capital and surplus levels, reliance on reinsurance, and investment concentration in real estate.

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Potential negative rating actions could arise from sustained underperformance, deteriorating risk-adjusted capitalisation, or a decline in the credit profile of HLIA's parent companies.

Conversely, a significant improvement in market position while maintaining strong performance could lead to positive rating actions, though this is not expected in the near to medium term.

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