A.M. Best Affirms Ratings of United Overseas Insurance Limited

  A.M. Best Affirms Ratings of United Overseas Insurance Limited

Business Wire

HONG KONG -- April 25, 2013

A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A
(Excellent) and issuer credit rating of “a+” of United Overseas Insurance
Limited (UOI) (Singapore). The outlook for both ratings is positive.

The ratings reflect UOI’s strong risk-adjusted capitalization, outstanding
operating performance and well-established market presence in the personal and
small and medium enterprise (SME) business segments in Singapore.

UOI has maintained a strong risk-adjusted capitalization, as measured by
Best’s Capital Adequacy Ratio (BCAR) and local regulatory capital adequacy
ratio. Given its forecasted business growth, UOI’s risk-based capitalization
is expected to remain solid in the near term.

UOI has a good track record of favorable operating results, which can be
largely attributed to its prudent underwriting philosophy. The company has
significantly outperformed the Singapore general insurance market in terms of
underwriting performance. The favorable return from its investment portfolio
also contributed to UOI’s outstanding operating performance.

As a member of the United Overseas Bank Limited (UOB) group, UOI benefits from
the extensive distribution network of UOB, and has established a solid market
presence in the personal and SME business segments. UOI also receives support
from UOB in terms of investment and risk management.

Offsetting rating factors include the potential volatility in UOI’s investment
return as well as the soft and competitive market conditions in Singapore.
With 42% of its invested assets in equities as at year-end 2012, UOI’s
investment portfolio is exposed to market risk, and its future investment
earnings could be impacted by any negative movement in the equity market.
However, UOI’s current level of capitalization is adequate to absorb the
potential investment earnings volatility over the short to medium term.

Future upward rating movements could occur if UOI can further strengthen its
enterprise risk management capabilities while maintaining its solid risk-based
capitalization and favorable operating performance.

Negative rating actions could occur if there is a significant deterioration in
UOI’s operating performance or its risk-adjusted capitalization level declines
to a level below A.M. Best’s expectations.

The methodology used in determining these interactive ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M. Best’s
rating process and contains the different rating criteria employed in the
rating process. Best’s Credit Rating Methodology can be found at

A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best
Company is the world's oldest and most authoritative insurance rating and
information source. For more information, visit www.ambest.com.

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Company, Inc.
Yanwei You
Associate Financial Analyst
Jeff Yeung
Associate Director
Rachelle Morrow
Senior Manager, Public Relations
+(1) 908 439 2200, ext. 5378
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
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