AM Best, the credit rating agency, has assigned Zhibao Labuan Reinsurance Company Limited (Zhibao Re) of Malaysia a Financial Strength Rating of B+ (Good) and a Long-Term Issuer Credit Rating of “bbb-” (Good), with a stable outlook.
Zhibao Re, licensed in April 2025, is a general professional reinsurer based in Labuan, Malaysia. The company is a wholly owned subsidiary of Zhibao Technology Inc., a rapidly growing InsurTech firm focused on digital insurance brokerage services in China.
AM Best notes that, in its early operations, Zhibao Re intends to build market presence by leveraging Zhibao Technology and its affiliates’ extensive partnerships with direct insurers and business platforms in China to source high-quality insurance risks.
AM Best highlights that the company may gain advantages from improved data quality, especially in health and medical products, as well as from the expertise of its affiliated insurance broker and managing general underwriter.
According to AM Best, Zhibao Re’s risk-adjusted capitalisation is projected to remain at a strong level by the end of 2025, as measured by Best’s Capital Adequacy Ratio (BCAR).
This assessment reflects AM Best’s evaluation of the company’s prudent investment approach, solid liquidity, and limited exposure to large or catastrophic losses.
AM Best further observes that BCAR may fluctuate in the short to medium term due to the relatively small initial paid-in capital and the anticipated rise in net underwriting leverage. While a parental guarantee is in place, AM Best expects additional capital injections from Zhibao Technology over the next few years.
However, AM Best emphasises that uncertainty regarding the timing and size of these contributions moderates the overall assessment of balance sheet strength.
AM Best reports that Zhibao Re plans to leverage its parent and affiliated companies’ business resources to source profitable business, with the goal of achieving break-even in its first year and maintaining a positive operating performance thereafter.
While AM Best recognises that start-up operations carry elevated operational and execution risks, it notes these are partially mitigated by the operational and underwriting support of Zhibao Technology and its affiliates.
Zhibao Re has established a defined risk appetite and associated policies in line with the Labuan insurance regulator’s requirements for solvency reporting and stress testing. AM Best anticipates that, as the company expands its business and risk exposure, its ERM framework will mature in accordance with its implementation plan.
AM Best notes that positive rating actions could occur if Zhibao Re successfully executes its business plan and strengthens its balance sheet.
Conversely, negative rating actions could arise if the company materially deviates from its business plan, resulting in weakened balance sheet strength or a decline in operating performance.
AM Best also highlights that a material deterioration in Zhibao Technology’s financial condition or capital planning could adversely affect Zhibao Re’s future capitalisation and credit fundamentals, potentially prompting a rating downgrade.
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