AM Best Affirms Credit Ratings of Dah Sing Insurance Company (1976) Limited

HONG KONG–()–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Dah Sing Insurance Company (1976) Limited (DSI) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect DSI’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.

The ratings also reflect the parental support from Dah Sing Financial Holdings Limited (DSFH) in terms of capital, brand recognition, business development, product distribution, risk management and operations.

The company’s risk-adjusted capitalisation remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and is supportive of the increased asset and underwriting risks from its business expansion. Following a large capital injection from DSFH in 2017, DSI has significantly expanded its investment portfolio over the past four years. The heightened investment risk is partially mitigated by the various control limits stipulated in DSI’s investment policy and the diversity in its equity portfolio. Other supportive factors to the balance sheet strength include organic capital growth from full profit retention.

DSI has consistently delivered a profitable operating performance over the past five years (2016-2020), mainly driven by its favourable investment results, albeit partially offset by the relatively marginal and volatile underwriting performance.

As a small-to-medium-size player in Hong Kong’s non-life insurance segment, DSI maintained a market share of approximately 1%, with a gross premium written of HKD 551.6 million in 2020. The company’s three major lines of business are motor, employees’ compensation and property inward treaty lines. DSI plans to scale down the proportion of its reinsurance inward treaty business to better control its risk accumulation, while further strengthening and diversifying its multi-channel distribution network through new business initiatives in growing business lines, including property damage, engineering, mortgage, and mid-markets with a focus on small-and-medium enterprises.

Offsetting rating factors include its high proportion of equity investments, which may generate volatility for the company’s capital and earnings. Other factors include the additional pressure on the company’s underwriting margin from potential adverse claims experience from motor and property inward treaty business.

Negative rating actions could occur if there is a material deterioration in the company’s risk-adjusted capitalisation or absolute size of capital and surplus, or a sustained unfavourable trend in operating performance. Negative rating actions are also possible if DSFH’s credit profile deteriorates materially, or if DSFH reduces the level of support it provides to DSI.

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 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 © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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