Fitch upgrades China Taiping Insurance

Fitch Ratings said it upgraded the issuer default ratings on China Taiping Insurance Group Ltd., China Taiping Insurance Group (HK) Co. Ltd. and China Taiping Insurance Holdings Co. Ltd.’s to A from A-.

Fitch also said it upgraded Taiping Life Insurance Co., Ltd.’s insurer financial strength rating to A from A- and affirmed the insurer financial strength rating of Taiping Reinsurance Co. Ltd. at A.

The upgrades resolved the Rating Watch positive and the outlook is stable.

Fitch also said it upgraded the rating on China Taiping’s $600 million cumulative perpetual subordinated securities to BBB+ from BBB-.

The ratings recognize the company’s material improvement in capital strength and financial flexibility after China Taiping raised HK$13.5 billion via an issue of new shares, the agency said.

Fitch also said it factored one-notch support in Taiping’s issuer default rating because of the Chinese state’s direct ownership of the insurer.

If necessary, there is a high probability that Chinese government would provide capital or policy support because the company is one of the few insurance groups that are wholly and directly owned by the China’s Ministry of Finance, the agency said.

The ratings also reflect the group’s wide revenue sources and consistently profitable operations, Fitch added.

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