Hang Seng Insurance Set to Benefit from Parent Company Ties

Hang Seng Insurance to Reap Benefits from Parentage: Hang Seng Insurance is set to keep profiting from its ties to Hang Seng Bank and HSBC. Operating under an exclusive bancassurance model, it will benefit from access to Hang Seng Bank’s client base. S&P Global Ratings gave it a “stable” outlook in a commentary.

Support and Growth Prospects: Hang Seng Insurance is crucial to HSBC Hong Kong’s retail banking and wealth management strategy. It has strong, long – term support from its parents in various aspects. New business sales rose 93% in the first half of 2024, and it’s expected to further penetrate the parent’s large clientele. It may also share more earnings with the parent in the next two years. With a 221% regulatory solvency ratio in 2023, it has a solid capital position. The parent bank might provide additional subordinated loans under the new regime.

Capital and Investment Considerations: However, Hang Seng Insurance’s capital position may stay slightly below S&P’s risk – based requirements due to more high – risk asset allocations like equities and alternatives. This could need more capital and increase investment risk sensitivity, though S&P rates its capital and earnings as “satisfactory.” Prudent investment management, backed by parent – bank controls, and value generation will support its financial risk profile.

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