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Moody's raises BOC Life outlook to positive, affirms rating

Moody's raised the outlook on BOC Grp Life Assurance Co. Ltd. to positive from stable and affirmed its insurance financial strength rating at A2.

The rating agency said Aug. 10 that the upgrade reflects the expectation that BOC Life will continue to "improve the stability of its profitability and its product mix towards more regular premium products." It also expects the insurer to further diversify its distribution channels while maintaining ample capitalization.

The rating affirmation reflects the Hong Kong-based insurer's "good franchise, robust capitalization and strong affiliate support."

The company's rating outlook could revert to stable if its keen dependency on bancassurance channels continues, profitability and capital adequacy ratio deteriorate, or support from affiliate Bank of China (Hong Kong) Ltd. falls.

Conversely, Moody's could further upgrade BOC Life's insurance rating if it further diversifies its distribution channels to show an expansion in product scope and profitability; consistently improves and stabilizes its profitability; or raises on a sustained basis its risk-adjusted capitalization above 6% or its local solvency ratio above 250%.