Malaysia’s Zhibao Labuan Reinsurance Credit Ratings Affirmed Good - AM Best
KUALA LUMPUR, Nov 7 (Bernama) -- AM Best has assigned a financial strength rating of B+ (Good) and a long-term issuer credit rating of “bbb-” (Good) to Malaysia’s Zhibao Labuan Reinsurance Company Limited (Zhibao Re).
The outlook assigned to these credit ratings (ratings) is stable, reflecting Zhibao Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
balanced sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile, and appropriate enterprise risk management (ERM).
Licensed in April this year, Zhibao Re is a general professional reinsurer domiciled in Labuan, Malaysia, and wholly owned by its ultimate parent, Zhibao Technology Inc, a high-growth insurtech company in China.
In its startup phase, Zhibao Re expects to build its market presence by leveraging Zhibao Technology and its affiliates’ extensive partnerships with direct insurers and business platforms across various industries in mainland China to source quality insurance risks.
The global credit rating agency views that the company can benefit from improved data quality, in particular for health and medical products, as well as the expertise of its affiliated insurance broker and managing general underwriter.
Zhibao Re’s risk-adjusted capitalisation is projected to be at the strong level as of year-end 2025, as measured by Best’s Capital Adequacy Ratio, supported by its prudent investment strategy and good liquidity, as well as limited exposure to large and/or catastrophic risks.
While a letter of guarantee is provided by its parent, AM Best in a statement said it also expects Zhibao Re to receive substantial capital injections from Zhibao Technology over the next few years.
During the initial stage of its operation, Zhibao Re plans to source profitable business leveraging its ultimate parent and affiliate companies’ business resources and experience. It aims to break even in its first year of operation and maintain a positive bottom line in the future.
Zhibao Re has its risk appetite and various risk policies in place, as it follows Labuan insurance regulator’s guidance to prepare for solvency reporting and stress tests. As Zhibao Re expands its business volume and risk exposure, AM Best expects that the company will build its ERM framework in accordance with its implementation plan.
-- BERNAMA