Chubb Insurance Singapore Ltd. #AA-# Rating Affirmed With Stable Outlook

Stocks and Financial Services Press Releases Monday October 16, 2017 17:30
SINGAPORE--16 Oct--S&P Global Ratings

SINGAPORE (S&P Global Ratings) Oct. 16, 2017--S&P Global Ratings today affirmed its 'AA-' local currency long-term counterparty credit rating and financial strength rating on Chubb Insurance Singapore Ltd. (Chubb Singapore). The outlook remains stable.

The financial strength rating on Chubb Singapore reflects our view of the insurer's highly strategic role to the Chubb group (Chubb Ltd.; core operating subsidiaries rated AA/Stable/--). We rate highly strategic subsidiaries one notch below the core operating subsidiaries.

S&P Global Ratings considers Chubb Singapore a highly strategically important subsidiary to Chubb group's regional business strategy. Chubb Singapore benefits from sharing the group's brand and strategy and cedes a portion of its premiums to a reinsurance subsidiary under the group. Chubb Singapore's contribution to the group's capital and earnings is not significant--less than 5%. That limits the insurer's group status to highly strategic.

Chubb Singapore is focusing on further diversifying its portfolio across segments after the inclusion of the financial lines from legacy Chubb. The company is also focused on growth in its other segments (property and casualty, accident and health lines), excluding motor and treaty lines.

In 2016, Chubb Singapore ranked sixth with a 4.2% market share in the competitive Singapore non-life insurance market and maintained stable underwriting results. We believe the 15-year regional distribution partnership Chubb Singapore recently signed will gradually strengthen the company's market share because it will benefit from the large customer base and sizable footprint in the region. However, we expect the competitive position to remain adequate in the near term, because it is unlikely for Chubb Singapore to aggressively increase its market share due to its consistent focus on maintaining underwriting profitability. We believe the company will continue to focus on property and casualty, financial lines, and accident and health.

We have a positive view on Chubb Singapore's operating performance. Prior to the merger of ACE Insurance Ltd. (Singapore) and Federal Insurance Co. (Singapore Branch) to form Chubb Singapore, their combined ratios were generally lower than that of domestic peers'. In 2016, the combined ratio for Chubb Singapore benefitted from merger-related cost efficiencies due to product, system, and operations synergies. We expect Chubb Singapore to maintain a combined ratio of 80%-85%, reflecting its focus on underwriting and ability to maintain lower loss ratios similar to that before the merger.

In our view, Chubb Singapore's capitalization has further strengthened post its merger with legacy Federal Insurance Co. (Singapore Branch). Nevertheless, Chubb Singapore's capital base of about Singapore dollar 146 million as of year-end 2016 moderates its extremely strong capital adequacy. In our base case, we expect Chubb Singapore to maintain a strong capital and earnings position over the next two years.

We view Chubb Singapore's risk position as intermediate. We consider the insurer's investment leverage to be conservative as it invests primarily in cash and fixed-interest investments.
The stable outlook on Chubb Singapore reflects the rating outlook on core entities of the Chubb group and our view that the insurer will remain a highly strategic subsidiary of the group.

We may lower the rating on Chubb Singapore if we lower the ratings on the group or if the company's strategic relationship with the group weakens. This could be due to deterioration in Chubb Singapore's operating performance or a change in the group's strategic focus, which we view as unlikely over the next 12-24 months.

We may upgrade Chubb Singapore if we consider it to be core to the group, indicating a strengthening of the company's strategic relationship with the group. This strengthening could be reflected through a higher level of integration with the group in areas such as product development and strategy. Another indication of the strengthening is the company's growth in its share of the Singapore insurance market while maintaining underwriting profitability.


Latest Press Release

mai welcomes real estate developer CMC on November 19

Market for Alternative Investment (mai) will list Chaoprayamahanakorn pcl, a leading real estate developer onNovember 19, under the ticker symbol "CMC". The company has a market capitalization at its initial public offering (IPO) of THB 3.00 billion...

KTC - Chilito Mexican Grill - Farm Factory provide members special privileges for payments made using QR Pay in the KTC Mobile app.

Mrs. Pranaya Nithananon, Vice President - Credit Card Business, "KTC" or Krungthai Card Public Company Limited, provides KTC VISA and KTC MasterCard credit card members who make payments through KTC QR Pay in the "KTC Mobile" app worth Bt. 300 or more...

Photo Release: KBank opens new flagship branch and THE WISDOM Lounge at ICONSIAM

Mr. Wirawat Panthawangkul (3rd from left), KBank Senior Executive Vice President, and Ms. Chadatip Chutrakul (4th from left), Director of ICONSIAM Co., Ltd., and Chief Executive Officer of Siam Piwat Co., Ltd., participated in the opening ceremony of...

Photo Release: CIMB Group Joins RippleNet to Power Instant Payments Across ASEAN

Tengku Dato' Sri Zafrul Aziz, Group CEO of CIMB Group (right), and Brad Garlinghouse, Ripple CEO (left) commemorating the strategic collaboration between CIMB Group and Ripple to power instant payments across ASEAN at the Singapore FinTech festival 2018...

CIMB Group Joins RippleNet to Power Instant Payments Across ASEAN

CIMB is one of the first banks to leverage blockchain technology to tap into region's USD120 billion remittance business CIMB Group ("CIMB" or "the Group") and Ripple have entered into a strategic collaboration to enable instant cross border payments...

Related Topics