A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Bermuda-registered Pacific Century Insurance Company, Ltd. (PCI) and Pacific Century Insurance Holdings, Ltd.

Best said the rating reflected the organisation's excellent capitalisation, stable operating performance, sound investment strategy and products. Following PCI Holdings' initial public offering in July 1999, the company's capital has achieved a consistent annual growth of nine percent, Best said.

The ratings agency also said that the company's ability to respond to changing market conditions and its practice of investing primarily in investment grade bonds and deposys contributed to the company's high rating.

"Offsetting the positive factors are the company's declining agency force and dependence on its agent distribution channel," Best said.

"The company's extensive agency force has historically been a competitive advantage; however, its ability to sustain growth has been challenged by several factors including intensified competition for qualified agents and competitors' increasingly popular alternative distribution channels such as bancassurance."

Pacific Century Insurance Holdings Ltd. has its operating headquarters in Hong Kong. The Group's principal activities are the provision of an extensive range of whole life, endowment and term life insurance products to individuals in Hong Kong.