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AM Best Affirms Credit Ratings of FuSure Reinsurance Company Limited

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of FuSure Reinsurance Company Limited (FuSure) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect FuSure’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings also reflect the implicit and explicit support from its ultimate parent, Tencent Holdings Limited (Tencent), including capital, business development, investment, risk management and operational support.

In its third year of start-up operation, FuSure received a capital injection from its shareholders in 2023, which doubled its paid-up capital to RMB 1.75 billion as of 31 December 2023. AM Best expects the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), will remain at the strongest level until 2027, according to the company’s provided business plan. The company has maintained a prudent investment strategy with its invested assets consisting predominantly of investment-grade fixed-income securities and cash and cash equivalents. The company has made an effort in diversifying its retrocessionaire panel in recent years. Its retrocession arrangements are considered appropriate with a sound credit rating reinsurance panel. Partially offsetting factors include modest capital size compared with other reinsurers in the region and execution risk from clientele expansion.

AM Best assesses FuSure’s operating performance as adequate. The company began operation in 2021 and has turned around since 2022. In its projection period (2024-2027), FuSure targets double-digit gross premium written growth, while maintaining low single-digit return on equity. Underwriting volatility is limited due to less volatile health coverage nature of key treaties the company has underwritten. Investment yield is forecast to be stable at a low single-digit, supported by its short-duration fixed-income invested assets.

With three years of operating history, FuSure focuses on health and accident lines in the Greater China region at its start-up phase. Leveraging on Tencent’s support in business development and distribution, the company is actively establishing its expertise and market presence in health and accident lines. Despite portfolio concentration in health lines, product risk is considered moderate, as its underlying risks consist of personal short-duration health insurance. While strengthening its core health business with product innovation, FuSure also plans to diversify its product offering and geographic reach from open market business in the medium term. As a start-up reinsurer, FuSure is exposed to elevated operational risk and business execution risk; these risks are offset partially by the fact that the company has an experienced management team, as well as strategic and operational support from Tencent.

FuSure’s ERM is considered appropriate to its risk profile. It has defined its risk appetite, established the three lines of defence governance structure, formulated various risk policies and performed stress testing. The company performs annual Own Risk and Solvency Assessment (ORSA) and submits its ORSA report to the local insurance regulator, the Hong Kong Insurance Authority. AM Best expects FuSure will enhance its ERM framework further as the company grows its business profile and risk exposure increases.

FuSure receives rating enhancement from implicit and explicit support from its ultimate parent, Tencent, which owns 85.01% of shares of FuSure. Tencent has a sizeable balance sheet and is listed on the Hong Kong Stock Exchange, with high financial flexibility and excellent credit fundamentals. The parent has demonstrated its commitment to FuSure via capital injection in 2023 for supporting its business growth. AM Best expects FuSure will continue benefiting from the parent group from explicit capital support, and implicit support in all aspects of operations and management, as well as particularly effective use of innovation and technology that could lead to competitive advantages in product design and pricing sophistication.

Negative rating actions could occur if FuSure materially deviates from its business plan, including adverse deviation from its projections, a significant decline in risk-adjusted capitalisation and liquidity level, or the company’s operating performance no longer supports its current ratings. Negative rating actions also could occur if there is a material decline in the level of support it receives from its ultimate parent, Tencent. While it is unlikely in the near term, positive rating actions could occur if the company can demonstrate successful execution of its business plan and further strengthen its balance sheet.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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