Moody's assigned Taikang Life Insurance Co. Ltd. an A3 insurance financial strength rating after it became the main life insurance operating subsidiary of Taikang Insurance Group Inc.
Moody's said in a Dec. 4 report that the rating outlook on Taikang Life is negative.
It also withdrew Taikang Insurance Group's A3 IFS rating on account of it no longer operating as an insurance business. The group has been transferring its life insurance-related assets, liability and capital to Taikang Life since Dec. 31, 2016, with the exercise scheduled to complete by end-2017.
Taikang Life's A3 IFS rating reflects its "good market position, and brand recognition, diversified distribution channels and good profitability." These are partially offset by the insurer's "very high exposure to high-risk assets," including real estate and equities, which could lead to volatility in Taikang Life's capitalization and profitability levels.
Moody's could change Taikang Life's outlook to stable if its high-risk assets to shareholders' equity falls regularly below 400% and/or if it continues to maintain good profits.
On the other hand, the rating agency may downgrade the insurer's rating if its high-risk assets to shareholders' equity remains consistently above 450% and its profits drop significantly, among other factors.