AM Best Affirms Credit Ratings of United Overseas Insurance Limited

SINGAPORE–()–AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” (Superior) of United Overseas Insurance Limited (UOI) (Singapore). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect UOI’s balance sheet strength, which AM Best assesses as very strong, as well as its very strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). In addition, UOI’s ratings factor in rating enhancement from the company’s ultimate majority ownership by and importance to United Overseas Bank Limited (UOB).

The company’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is expected to remain comfortably at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio. AM Best expects UOI’s capital adequacy to remain supported by robust internal capital generation, low underwriting leverage and a balanced investment strategy. Over the past five years, consistently strong earnings have enabled the company to bolster reported shareholders’ equity, reaching SGD 424 million (USD 320 millions) in 2020. A partially offsetting balance sheet factor remains the company’s moderate reinsurance usage, which enables the underwriting of large limit risks. Despite this, the company maintains long-standing relationships with key reinsurers, as well as the reinsurance panel consisting of well-rated counterparties.

The company has a track record of very strong operating performance, as evidenced by a five-year average combined ratio of 44% and operating ratio of 12% (2016-2020). The COVID-19 environment has caused a level of volatility in the underwriting and investment results; however, AM Best does not expect this to drive a material shift in UOI’s performance fundamentals over the medium term. UOI’s excellent underwriting performance remains driven by very favorable loss ratios emanating from the company’s targeted underwriting approach and access to affiliated bank channel business from UOB. Technical results in recent years also have benefited from significant inward commissions, reflecting the strong performance of business ceded to reinsurers. UOI’s investment income also continues to be viewed as favorable in the context of recent investment market conditions with non-technical operations having been a key contributor to overall earnings over many years.

UOI holds a strong competitive position in Singapore’s non-life market as the sole insurance subsidiary of UOB. The company’s affiliation with its banking parent enables good access to business through the bancassurance channel, as well as a strong brand and reputation to trade upon in other target segments. UOI’s underwriting portfolio remains focused predominantly in Singapore, with the company expected to approach regional growth cautiously and remain centered on opportunities arising in connection with UOB’s regional expansion. In addition, UOI plays an important role in providing risk management and insurance advisory services to the UOB group.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 New York, 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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