Correction: Fitch Completes Notching Review for APAC Insurance Sector
05/10/2015 10:49
(The following statement was released by the rating agency) HONG KONG, October 05 (Fitch) This announcement corrects the version published on 3 August 2015 to include disclosure language relating to the shareholdings that Muang Thai Life Assurance Co., Ltd. and Thai Life Insurance Co. have in Fitch Ratings (Thailand) Ltd. and Sri Lanka Insurance Corp. Ltd has in Fitch Ratings Lanka Limited, which was missing from the previous version. Fitch Ratings has completed a portfolio review covering 34 insurance groups within the Asia-Pacific (APAC) insurance sector focused exclusively on application of Fitch's recently updated notching criteria for the insurance industry. The purpose of the review was to identify any ratings that should be changed as a result of the application of the updated notching criteria. Fitch published updated insurance notching criteria on 14 July 2015, following publication of an initial exposure draft of proposed criteria on 12 May 2015. The updated notching criteria appear in Section VI of the insurance master criteria report Insurance Rating Methodology. Notching refers to the practice of establishing a given rating relative to a defined "anchor" rating, using guidelines linked to certain characteristics of the rating that is being notched. For Fitch's insurance ratings, the Insurer Financial Strength (IFS) Rating is the initial anchor rating, and other ratings that are notched relative to it include Issuer Default Ratings (IDRs) of operating and holding companies, and debt/hybrid obligation ratings. Fitch updated its notching criteria in light of changes in the regulatory landscape, including the movement in Europe and other jurisdictions to Solvency 2 or a Solvency 2-type regulatory framework. As a result, from a global perspective, notching changes are more pronounced in Europe and other such jurisdictions, and more limited in the U.S. and similarly regulated countries. KEY RATING DRIVERS For this ratings review, the key rating driver was the impact of updated notching criteria. See most recently published rating action commentaries or research reports for additional information on other key ratings drivers pertinent to specific entity ratings. RATING SENSITIVITIES Not applicable to this portfolio review given its limited focus on implementation of updated notching criteria. See most recently published rating action commentaries or research reports for additional information on rating sensitivities pertinent to specific entity ratings. SUMMARY OF RATING ACTIONS A link to a summary report that details all of the rating actions taken as part of the portfolio review is available via the link in this media release. The linked summary report includes: --A full list of ratings and related rating actions --A hyperlink to each rated entity's ratings summary page on the Fitch website --Primary analyst and secondary analyst contact information --Participation status The review has resulted in six ratings being upgraded, two ratings being downgraded and 47 ratings being affirmed. PREVIOUSLY REVIEWED ENTITIES While included in the APAC insurance sector, the ratings for the following groups and entities were not reviewed as part of the portfolio review. These entities' ratings were previously updated to reflect the new notching criteria, with details available via the ratings announcement links below. -- China Taiping Insurance Group Ltd. and entities/debts /a -- QBE Insurance Group Limited and entities/debts /a -- Suncorp Group Limited and entities /a -- Ageas Insurance Company (Asia) Limited and debt /a -- Fukoku Mutual Life Insurance Co and debts /a LIMITATIONS The portfolio review was limited in scope, and only included an assessment of updated notching criteria as outlined in Section VI (Notching: Debt, Hybrid, IFS Rating and Holding Companies) of Fitch's insurance master criteria. None of the factors outlined in Section I (Key Rating Factors) of the master criteria, or any other elements discussed in the master criteria, were reviewed. Where relevant, Fitch considered the appropriateness of the relative ranking of ratings in the APAC insurance sector, after initial consideration of updated notching guidelines, as part of the portfolio review. Contact: Committee Chairperson Keith M. Buckley, CFA Managing Director +1-312-368-3211 Fitch Ratings, Inc. 70 W. Madison Street Chicago, IL 60602 Muang Thai Life Assurance Company Limited (in which Kasikornbank Public Company Limited (KBANK) holds a 38.3% economic interest) owns 10% of the shares in Fitch Ratings (Thailand) Ltd. Kasikorn Asset Management Company Limited (in which KBANK holds a 100% stake) owns 10% of the shares in Fitch Ratings (Thailand) Ltd. No shareholder, other than Fitch Ratings Limited, is involved in the day-to-day operations of, or credit reviews undertaken by Fitch Ratings (Thailand) Ltd. Thai Life Insurance Company Limited has a 10% equity stake in Fitch Ratings (Thailand) Ltd. No shareholder other than Fitch Ratings Limited is involved in the day-to-day rating operations of, or credit reviews undertaken by, Fitch Ratings (Thailand) Ltd. Sri Lanka Insurance Corp. Ltd has a 1.78% equity stake in Fitch Ratings Lanka Ltd. No shareholder other than Fitch Ratings, Inc. is involved in the day-to-day rating operations of, or credit reviews undertaken by, Fitch Ratings Lanka Ltd. Additional information is available on www.fitchratings.comContact: Committee Chairperson Keith M. Buckley, CFA Managing Director +1-312-368-3211 Fitch Ratings, Inc. 70 W. Madison Street Chicago, IL 60602 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Leni Vu, Sydney, Tel: +61 2 8256 0304, Email: leni.vu@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Insurance Rating Methodology (pub. 14 Jul 2015) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868367 Related Research APAC Insurance Notching Sector Review https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869289 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE