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December 25, 2024 -Wednesday

 
  A.M. BEST REVISES OUTLOOKS TO NEGATIVE FOR ERGO INSURANCE PTE. LTD.

Tuesday 31/01/2017



SINGAPORE, Jan 31 (Bernama-BUSINESS WIRE) -- A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of ERGO Insurance Pte. Ltd. (ERGO Insurance) (Singapore).
 
The revised outlooks reflect the declining trends in ERGO Insurance’s risk-adjusted capitalization and operating performance relative to its peers. The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has trended downward due to high dividend payments and retained losses in 2016. Additionally, planned premium growth is expected to increase underwriting leverage, which could further lower its risk-adjusted capitalization going forward.

In response, ERGO Insurance has taken remedial actions by focusing on its historically profitable lines of business and adopting cost reduction measures to improve operating performance.

Partially offsetting these negative Credit Rating (rating) factors is the company’s broadened business profile as a member of the ERGO Group. Through focused marketing and branding strategies, ERGO Insurance has diversified its distribution network by developing of the brokerage channel. Nonetheless, as a small player in the market, the company is susceptible to adverse performance from large corporate risks and expense strain.

The outlooks could be revised to stable if the company improves its risk-adjusted capitalization or achieves consistent profitability that is better than its peers. Negative rating actions may arise from further deterioration of the company’s operating results or risk-adjusted capitalization.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication. 

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
 
Contacts
A.M. Best
Faith Tan, +65 6589 8400, ext. 212
Associate Financial Analyst
faith.tan@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Chi-Yeung Lok, +65 6589 8400, ext. 211
Senior Financial Analyst
chi-yeung.lok@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com
 
Source: A.M. Best
 
View this news release online at:
http://www.businesswire.com/news/home/20170127005612/en  

--BERNAMA 

 
 
 

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