KUALA LUMPUR, Aug 13 (Bernama) -- A.M. Best has downgraded the financial strength rating (FSR) to B++ (good) from A- (excellent) and the long-term issuer credit ratings (Long-Term ICR) to ‘bbb+’ from ‘a-’ of ERGO Insurance Pte Ltd (ERGO Insurance) Singapore.
The outlook of the Long-Term ICR has been revised to negative from stable, while the FSR outlook remains stable, a statement said.
The ratings reflect the company’s balance sheet strength,which A.M. Best categorised as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The downgrade reflects a material decline in capital below projections provided to A.M. Best in January 2018 due to weaker than expected performance.
The Long-Term ICR outlook revision to negative reflects A.M. Best’s concern with the execution risk related to the ERGO Group AG’s plan to reposition the company in Singapore. It could be revised to stable if the company demonstrates a trend of positive results.
Negative rating actions may arise from further deterioration in the company’s capital due to weak operating performance and reassessment of its strategic role as a wholly owned subsidiary of the Munich Reinsurance Company could also result in negative rating actions.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Details at www.ambest.com.
-- BERNAMA
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