AM Best Comments on Credit Ratings of Zhongyuan Agricultural Insurance Co., Ltd. Following Severe Rainfall in Henan Province
HONG KONG–(BUSINESS WIRE)–#insurance—AM Best has commented that the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Zhongyuan Agricultural Insurance Co., Ltd. (ZYIC) (China) remain unchanged following the heavy rains that have flooded the province of Henan since 19 July 2021. This extreme weather disaster, which has affected the central and northern part of the province most severely, has broken meteorological records that stood for the past few decades.
ZYIC is a professional agricultural insurer incorporated in Henan province. Its underwriting book contains over 60% crop and livestock insurance, while other lines of business include motor, property, liability, accident and health. Based on the latest information provided by ZYIC, AM Best sees no imminent pressure to the company’s credit fundamentals. However, it is still too early to measure the full extent of the damages and losses derived from this weather-related event as the rescue work is still underway and claims reporting will take time. AM Best does have concern regarding the uncertainty over how ZYIC’s total incurred claims may develop, especially relating to its agricultural, motor and property lines of business, given the company’s concentrated net exposure to natural catastrophe risk in Henan.
AM Best will continue to monitor the development of the event and hold discussions with ZYIC’s management to assess the subsequent implications for its balance sheet strength and operating performance.
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