The rating affirmations reflect ECICS’ strong balance sheet, underpinned by low underwriting leverage and a prudent investment portfolio.

The negative outlooks reflect the company’s continued losses and diminished business profile. Since 2014, ECICS has been working to grow outside of its core bond insurance business, which is a small and cyclical market segment. Although the company has made some inroads into other general insurance segments, notably motor, this line remains loss-making. The resulting strain on profitability has been greater than expected, and ECICS’ operating performance has fallen below the industry average.

Positive rating actions could occur if ECICS is able to achieve consistent profitability while strengthening its business profile. A significant reduction of ECICS’ risk-adjusted capitalization or deterioration in operating performance could result in negative rating actions.

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

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