"The change in outlook reflects the improved capitalization of PICC P&C and the broader PICC Group over the past year," says Sally Yim, a Moody's Vice President and Senior Credit Officer.
"PICC P&C's gross underwriting leverage (based on Moody's methodology) has come down to below 7x from a high of 9.0x at end-2010. While this level still is high on a global basis, we take into account the relatively low capital intensity of PICC P&C's underwriting profile with about 70% of its premiums sourced from motor insurance, which is short-tail and has lower reserving risk," she adds.
Improving profitability has contributed to stronger organic capital growth. For the first half of 2012, the combined ratio was 92.4%, substantially down when compared to 97.8% in 2010. Relatively benign catastrophe losses, favorable loss experience in motor insurance and commercial property insurance, as well as lower expense ratio driven by cost control have driven stronger underwriting results.
While there are negative headwinds on profitability from deregulation of commercial motor premium rates, as well as increased expenses for acquisition of business, investment in underwriting and claims infrastructure, compliance, etc., we believe that PICC P&C will be able to maintain a good level of underwriting profitability due to its market leadership and focus on selective underwriting.
The parent of PICC P&C, PICC Group, has completed its initial public offering on the Hong Kong Stock Exchange on December 7, 2012. The Group has indicated that all of the IPO proceeds will be used to strengthen the capital base of its subsidiaries to support business growth. At this stage, it is uncertain as to whether PICC Group will inject capital into PICC P&C, as the group's life and health insurance affiliates are more in need of capital because of weak solvency margin ratios.
"Nonetheless, the Group now holds additional capital following the IPO. Should there be any capital needs, the Group would now have the ability to inject capital into PICC P&C," says Yim.
Given the listing of PICC Group, the effective government ownership of PICC P&C has declined to 57.5% from 69% (or to 56.1% if an over-allotment option is exercised). Nonetheless, Moody's believes that the level of support from the Chinese government to PICC P&C would not change significantly, given that the government remains the majority shareholder and the company's strategic importance as the industry's flagship company.
PICC P&C's rating continues to be underpinned by the company's outstanding industry position in China, as well as its huge underwriting capacity, which is a solid competitive advantage when it solicits business from large corporations and state-owned enterprises.
These strengths are offset by PICC P&C's relatively weak capital adequacy as indicated by its high, yet moderating, gross underwriting leverage, though we take into account its less risky product profile which focuses mainly on motor insurance. Its financial leverage is also high, as it has issued a total of RMB19 billion of subordinated debt in order to replenish its solvency over the past five years.
PICC P&C's A1 IFS rating receives a one-notch uplift from the a2 baseline credit assessment. This incorporates the potential for support to be provided to the company in the event of stress by the Chinese government, either directly or through funding sources under its control.
Upward rating pressure could emerge if (1) its gross underwriting leverage decreases to below 5x; (2) financial leverage at PICC P&C decreases to below 20%; (3) its profitability further improves with a combined ratio consistently below 92%.
However, given the current baseline credit assessment of a2, under the current support and dependence assumptions, PICC P&C's rating would not be upgraded if China's sovereign rating (currently with a positive outlook) is upgraded.
On the other hand, downward rating pressure could emerge if: (1) capital adequacy weakens again, with its gross underwriting leverage increases to above 7x; (2) PICC P&C incurs a significant catastrophe loss (net, after-tax), which exceeds 10% of its shareholders' equity; (3) its combined ratio consistently stays above 100%; or (4) a significant decline in Moody's assessment of the level of potential support from the Chinese government.
The methodologies used in this rating were Moody's Global Rating Methodology for Property and Casualty Insurers published in May 2010, and Government-Related Issuers: Methodology Update published in July 2010. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.
Headquartered in Beijing, PICC Property & Casualty Co Ltd is the largest P&C insurance company in China, offering motor vehicle insurance, commercial property insurance, cargo insurance, and others. For first-half 2012, gross written premiums were RMB101.2 billion. As of June 30, 2012, total assets amounted to RMB290.6 billion, and shareholders' equity was RMB43.7 billion.
The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.
Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Sally Yim VP - Senior Credit Officer Financial Institutions Group Moody'sInvestors Service Hong Kong Ltd. 24/F One Pacific Place 88 Queensway Hong Kong China (Hong Kong S.A.R.) JOURNALISTS: (852) 3758 -1350 SUBSCRIBERS: (852) 3551-3077 Stephen Long MD - Financial Institutions Financial Institutions Group JOURNALISTS: (852) 3758 -1350 SUBSCRIBERS: (852) 3551-3077 Releasing Office: Moody's Investors Service Hong Kong Ltd. 24/F One Pacific Place 88 Queensway Hong Kong China (Hong Kong S.A.R.) JOURNALISTS: (852) 3758 -1350 SUBSCRIBERS: (852) 3551-3077 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.
All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.
MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."
Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.
Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.
This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.
Nachrichten zu PICC Property and Casualty Company Ltd (H)
- vom Unternehmen
- Peer Group
Eventuell finden Sie Nachrichten, die älter als ein Jahr sind, im Archiv
Um Ihnen die Übersicht über die große Anzahl an Nachrichten, die jeden Tag für ein Unternehmen erscheinen, etwas zu erleichtern, haben wir den Nachrichtenfeed in folgende Kategorien aufgeteilt:
Relevant: Nachrichten von ausgesuchten Quellen, die sich im Speziellen mit diesem Unternehmen befassen
Alle: Alle Nachrichten, die dieses Unternehmen betreffen. Z.B. auch Marktberichte die außerdem auch andere Unternehmen betreffen
vom Unternehmen: Nachrichten und Adhoc-Meldungen, die vom Unternehmen selbst veröffentlicht werden
Peer Group: Nachrichten von Unternehmen, die zur Peer Group gehören
Analysen zu PICC Property and Casualty Company Ltd (H)
Mehr zur PICC Property and Casualty Company-Aktie
Heute im Fokus
Springer-Konzern verwirft Umwandlung der Rechtsform. Tim Cook blamiert sich mit der iPhone-Kamera - und reagiert humorlos. Wachstum in China kurbelt VW-Verkäufe wieder an. Triebwerksbauer Rolls-Royce kappt wegen Krise Dividende. Japans Regierung deutet Intervention gegen starken Yen an.
Wo verdiene ich am meisten?
Diese Aktien sind auf den Kauflisten der Experten
Wer hatte das größte Emissionsvolumen?