Sun Hung Kai Properties Insurance Limited (SHKPI) is poised to maintain its financial stability, bolstered by a solid operating performance and robust balance sheet, according to AM Best.
As of the fiscal year ending June 30, 2024, SHKPI’s risk-adjusted capitalisation remained at the strongest level, reflecting the company’s sound financial health. The insurer’s prudent shift towards cash and high-quality bonds has further enhanced its financial position, reducing its exposure to the volatile Chinese real estate market.
AM Best anticipates that this conservative investment strategy will position SHKPI well to weather potential market volatility in the future.
Strong Underwriting and Investment Performance
SHKPI has continued to outperform industry peers with strong underwriting profitability. For the fiscal year 2024, the company reported a double-digit return on equity, driven by favourable underwriting results and higher investment returns, supported by rising interest rates.
The company is also expected to benefit from the stable premium income generated by its parent group, which helps minimise acquisition costs and provides ongoing financial support.
Focus on Commercial Insurance and Profitability
Although SHKPI holds a modest share of Hong Kong’s general insurance market, its emphasis on commercial and employees’ compensation insurance, combined with a low-cost business model, underpins its stable profitability.
AM Best projects that these factors, alongside SHKPI’s strong risk management practices, will help sustain the company’s solid financial standing in the near term.
With its conservative investment approach, stable revenue stream from its parent company, and focus on profitable insurance segments, SHKPI is well-positioned for continued success.
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