AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) of the China-based COSCO SHIPPING Captive Insurance Company’s (COSCO SHIPPING) captive. The outlook of these credit ratings is stable. AM Best says the ratings reflect COSCO SHIPPING captive’s balance sheet strength, which it assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the wide range of support the company receives from its parent, China COSCO SHIPPING Corporation Limited which receives governmental support. COSCO SHIPPING captive’s risk-adjusted capitalisation remained at the strongest level in 2022, as measured by Best’s capital adequacy ratio. The company’s balance sheet strength is assessed as “very strong”, underpinned by low underwriting leverage and a prudent reinsurance programme. Since its inception in 2017, the captive insurer’s capital and surplus has consistently grown, supported by a favourable dividend retention arrangement. COSCO SHIPPING captive’s underwriting book primarily consists of marine hull business for the parent group and its affiliates, which AM Best expects will be its key source of premiums over the medium term. Other business lines include liability, commercial property, cargo, motor, accident and health.
