S&P ASSIGNS 'A-' RATING TO SUN HUNG KAI PROPERTIES INSURANCE LTD.

HONG KONG, Feb 1 Asia Pulse - Standard & Poor's (S&P) today assigned its single-'A'-minus insurer financial strength rating to Sun Hung Kai Properties Insurance Ltd. (SHKPI), a wholly owned subsidiary of (A/Stable/--).

The rating on SHKPI reflects implicit support from Sun Hung Kai Properties, as well as the company's good operating performance, satisfactory capital levels and strong management, S&P said in a statement.

The rating is counterbalanced by a concentrated and volatile business profile, and high-risk investment portfolio. The implicit support from Sun Hung Kai Properties is reflected in the high level of in-house business and managerial and operational integration.

SHKPI is an insurance subsidiary of the Sun Hung Kai Properties group, one of the dominant property groups in Hong Kong. At present, group referrals account for over 60 per cent of SHKPI's business.

"Given these linkages, SHKPI operates primarily in the property sector and has a high concentration in the construction sector employee compensation class. It retains only about one third of the risk it underwrites, reflecting the great magnitude of many of its exposures," the ratings agency said.

It said SHKPI ...