S&P Global Ratings maintained HSBC Life (International)'s AA- long-term financial strength and issuer credit ratings with a stable outlook, according to a Tuesday release.
The rating agency said its revised criteria for insurers' risk-based capital does not affect the assessment of HSBC Life (International)'s financial strength.
S&P expects the insurer to retain its core subsidiary status for Hongkong and Shanghai Banking, with the former's ratings and outlook at the same level as the parent's.
The rating agency believes that HSBC Life will continue to be important to the parent's retail banking and wealth management strategy.
S&P expects the insurer's capitalization and earnings to remain satisfactory, although greater allocations to higher-risk assets and an increased target profit-sharing ratio may slightly weaken its position.
Still, the insurer's strong brand anchoring its robust position in Hong Kong's life insurance market, efficient operations, and prudent investment management should mitigate this risk and contribute to financial stability, S&P said.
HSBC Life's liquidity profile has slightly weakened due to higher investment in risky assets, but its ample liquid assets will support its immediate payment needs, according to the rating agency.
Future rating actions will depend on movements in the parent's ratings or changes in the insurer's core status within the group, although S&P said an upgrade is unlikely over the next two years.
