AM Best Affirms HDFC International Life's Ratings
AM Best affirmed HDFC International Life and Re Company Limited's B++ (Good) financial strength rating and stable outlook.
Updated on Nov. 6, 2026 in Corporate Finance
AM Best affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb" (Good) of HDFC International Life and Re Company Limited, and assigned a stable outlook. The affirmation was published on 2026-11-06.
Why it matters
The affirmation reflects a rating agency's assessment of the company's capital and earnings position, which bears on its standing with cedents and counterparties. The rating is accompanied by weaker FY 2026 returns and a declining BCAR score, factors that the agency weighs alongside the company's financial strength.
AM Best reported return on equity under IFRS 17 of 1.6% for FY 2026, down from 4.4% in FY 2025, and a combined ratio of 101% for the company's short-term business. The company reported profitable results in four of the last five fiscal years, but the extraction does not state how these figures compare with peer insurers.
The players
AM Best
AM Best is a credit rating agency specializing in the insurance industry, whose ratings are widely used by insurers, reinsurers and their counterparties.
HDFC International Life and Re Company Limited
HDFC International Life and Re Company Limited is a reinsurance subsidiary based in the United Arab Emirates of HDFC Life Insurance Company Limited, which is majority held by HDFC Bank Limited.
The details
AM Best's affirmation covers the company's financial strength and long-term issuer credit ratings, with a stable outlook. The rating agency cited a decrease in the company's BCAR scores in FY 2026, primarily due to significant growth in its health reinsurance business, and noted that underwriting performance was affected by deteriorating loss ratios in select reinsurance lines and high profit commissions.
Timeline
FY 2022 to FY 2026: Company reported profitable results in four of the five fiscal years.
FY 2025: Return on equity under IFRS 17 was 4.4%.
FY 2026: BCAR scores decreased, return on equity fell to 1.6%, and the combined ratio reached 101%.
- 2026-11-06
AM Best published the rating affirmation.
Market Dynamics
The affirmation applies AM Best's methodology, which weighs BCAR scores and underwriting results together, to a company whose capitalisation remains at the agency's strongest level despite a decline in its FY 2026 BCAR. The stable outlook places the company's trajectory within the agency's existing rating framework rather than signalling a change in it.
For investors holding HDFC Life Insurance Company Limited or HDFC Bank Limited, the affirmation indicates the subsidiary's rating remains at B++ (Good) with a stable outlook. The decline in FY 2026 return on equity to 1.6% and the rise of the combined ratio to 101% are relevant to any assessment of earnings quality.
The takeaway
The affirmation shows that a rating agency can hold a company's capital position steady while its earnings weaken. Readers tracking insurers should watch whether the reinsurance growth that reduced BCAR translates into the profitable direct retail business expected in India.
Further reading
For broader context on how insurers are rated and financed, see Corporate Finance.
Source note: This article includes information reported by Ambest.
