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March 15, 2006

New reports affirm stable outlook on HK insurance sector

Standard & Poor's said in two reports published on Wednesday that it had affirmed its stable outlook on Hong Kong's insurance industry, citing strong business growth opportunities for the life insurance sector.

In a report titled "Hong Kong Nonlife Insurance Outlook Remains Stable Despite Declining Underwriting Profit," the rating agency noted the likelihood that operating performances in both the life and nonlife sectors will remain buoyant through 2006.

Standard & Poor's said the balance sheets of companies in the general insurance sector have benefited from a fourth successive year of satisfactory underwriting performances.

The report said that despite signs that premium rates are stabilizing in the employee compensation sub-sector, which has performed poorly in the past, the outlook on the industry may be revised if price-cutting intensifies elsewhere or if a recent decline in underwriting profits accelerates.

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Posted by Tom Troceen