AM Best has affirmed the financial strength rating of “A-” (Excellent) and the issuer credit rating (ICR) of “a-” for China International Reinsurance Company (CIRe). The outlook on both ratings has been revised to stable from positive.

The ratings reflect CIRe's high liquidity position, favorable investment yield, prudent reserving practice and diverse geographic spread of risk relative to its regional peers in Asia. The ratings also acknowledge the company's satisfactory risk-based capitalisation and well established profile in Hong Kong, Macau and Mainland China.

As a result of various weather-related catastrophic losses, CIRe suffered an increase in its net loss ratio to 74.2 percent in 2005 from 72.1 percent in 2004, leading to a decline in underwriting profits in 2005. Its aggregate net exposure to Hurricane Katrina and the flooding event in Mumbai in 2005 exceeded HK$212m ($27.25m) as of 31 December 2005.