AM Best affirmed the financial strength rating of A+ (Superior) and the long-term issuer credit rating of “aa-” (Superior) from United Overseas Insurance Limited (UOI) (
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 management of business risks. In addition, UOI’s ratings take into account the improved rating of the company’s ultimate majority ownership and the importance of United Overseas Bank Limited (UOB), a leading banking company in
UOI’s balance sheet strength assessment is supported by its risk-adjusted capitalization, which is expected to remain comfortably at the highest level over the medium term, as measured by Best’s capital adequacy ratio (BCAR). . AM Best expects UOI’s capital adequacy to continue to be supported by stable internal capital generation, low underwriting leverage and a balanced investment strategy. A partially offset balance sheet factor remains the company’s heavy reliance on the use of reinsurance, which allows for the underwriting of significant limit risks. Nevertheless, the company has longstanding relationships with major reinsurers and a reinsurance panel of highly rated counterparties.
AM Best considers the company’s operating performance to be very strong, as evidenced by its five-year average combined ratio of 44.7% and cost/income ratio of 12.6% (2017-2021). UOI’s strong underwriting performance continues to be driven by very favorable loss ratios resulting from the company’s focused underwriting approach and access to UOB’s affiliate banking channel business. Underwriting results in recent years have also benefited from significant incoming commissions, reflecting the good performance of business ceded to reinsurers. AM Best views UOI’s investment income as favorable, with non-technical operations having been a key contributor to overall earnings for many years.
UOI has a strong competitive position in the Singapore non-life market as the sole insurance subsidiary of UOB. The company’s affiliation with its parent banking company provides good access to business through the bancassurance channel, as well as a strong brand and reputation to build on in other target segments. UOI’s underwriting portfolio remains primarily focused on
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Source: AM Best