Business Editors
SINGAPORE--(BUSINESS WIRE)--Dec. 7, 2001
Standard & Poor's--Standard & Poor's today affirmed its double-'A' counterparty credit and insurer financial strength ratings on Singapore insurer NTUC Income Insurance Cooperative Ltd. (NTUC Income).
The outlook is stable.
The ratings reflect the company's dominant position in the Singapore life and nonlife insurance industry, its excellent franchise, conservative balance sheet profile, and sound operating performance. Moderating factors are the pressures of an increasingly competitive operating environment in Singapore and the volatile investment climate.
Major rating factors:
-- NTUC Income is the largest general insurer and second largest life insurer in Singapore. This is underpinned by the company's superior name recognition in the retail market and strong relationships with its members. -- NTUC Income's capital position has remained strong and resilient in the face of volatility in investment asset values in 2001. For its nonlife business in fiscal year 2000, its total adjusted capital (TAC) was a solid 254% of net premiums written, while for its life operations, TAC was a strong 11.3% of its nonlinked policy liabilities. -- NTUC Income's earnings have been very good, reflecting its sound underwriting performance and significant expense advantage. Despite the strong competition in the market and uncertain economic outlook, its nonlife operations posted a strong ROE of 17% for fiscal year 2000. Its life insurance earnings (based on operating surplus) also returned a satisfactory 6.1% on its average assets.
OUTLOOK: STABLE
NTUC Income's growth in net premiums is expected to continue, albeit at a slower rate, in line with the industry. Growth strategies leveraging off the company's expense and technological advantages, together with the promotion of new product initiatives in 2002, should consolidate its market share in the general and life insurance markets, while enabling the company to maintain its healthy earnings profile.
The NTUC Income is a Security Circle insurer, which means that it voluntarily underwent Standard & Poor's most comprehensive analysis and was assigned a rating in one of the top four categories for financial security.
