Zurich Insurance Taiwan (ZIT) has been assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” by A.M. Best. The outlook of these ratings is stable.
The firm is no longer affiliated with Zurich Insurance Group, despite its current name. Hozan Investment completed its acquisition of ZIT on January 17. ZIT is allowed to use the Zurich name until the formal name change to Hotai Insurance scheduled to occur by March 1.
Hozan Investment is a wholly owned subsidiary of Ho Tai Motor – a Taiwan distributor of well-known auto brands such as Toyota, Lexus and HINO.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
“The ratings reflect ZIT’s sound risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), its prudent underwriting practices, and the sustainable competitive advantage in the motor distribution channel derived from being a subsidiary of Ho Tai Motor,” he said.
The ratings agency anticipates that Ho Tai Motor’s distribution network will allow ZIT to scale up its motor insurance portfolio in the near future.
“Offsetting rating factors include a high expense ratio, and the execution risk on the business transformation and strategic integration with ZIT’s new parent,” A.M. Best added.
It explained that positive rating actions could occur if ZIT can successfully implement its business transformation plan and continuously demonstrate stable and favorable operating results. Negative rating actions could occur if ZIT’s risk-adjusted capitalization declines sharply due to a higher-than-expected increase in the company’s risk profile.
Ho Tai Motor also operates and invests in car rental and leasing, auto finance, auto insurance and auto parts businesses.
Related stories:
A.M. Best issues ratings for Allied World, Fairfax
