AM Best Affirms Credit Ratings of Luen Fung Hang Insurance Company 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 Luen Fung Hang Insurance Company Limited (LFH) (Macau). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect LFH’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

LFH’s balance sheet strength is supported by risk-adjusted capitalisation that is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital and surplus grew organically through partial profit retention over the past few years, supported by a track record of positive operating results. The company’s investment strategy remained prudent in 2021, with a majority of the investment portfolio composed of bonds, fixed deposits, as well as cash and cash equivalents.

LFH continued to rank second in the Macau’s non-life insurance market in 2021, with a market share of 22.8% in terms of gross premium written (GPW). The company continues to leverage distribution support from its bank shareholders and maintains a competitive edge in acquiring good quality business through the bancassurance channel. In 2021, the company’s business was slightly impacted by the COVID-19 situation in Macau, and its GPW decreased by 3.9% in 2021. Nevertheless, both net combined ratio and return on equity remained strong at 58% and 20%, respectively.

LFH is well-positioned for its current ratings. Negative rating actions could occur if LFH’s operating performance exhibits a material and deteriorating trend in profitability such that it no longer supports a strong assessment, or if LFH’s risk-adjusted capitalisation experiences a significant deterioration.

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 © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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