KUALA LUMPUR, Dec 16 -- AM Best has downgraded the Financial Strength Rating to C (weak) from C+ (marginal) and the Long-Term Issuer Credit Rating to ‘ccc’ from ‘b-’ of Capital General Insurance Company Limited (CGI) Papua New Guinea.
According to a statement, the outlook of these credit ratings remained negative.
Concurrently, these ratings have been withdrawn as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect CGI’s balance sheet strength, which AM Best described as weak, as well as its adequate operating performance, limited business profile and weak enterprise risk management.
The rating downgrades reflect a deterioration in AM Best’s view of CGI’s operating performance and balance sheet strength fundamentals.
The company’s underwriting and operating performance metrics have exhibited a high degree of volatility over a number of years.
Most recently, a notable increase in large loss activity arising from the company’s property portfolio during the second half of 2019 is expected to drive a material pre-tax operating loss for full-year 2019.
A number of single large property losses, principally arising from fire events, has triggered the company’s reinsurance protection multiple times during the second half of this year.
Consequently, CGI’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, continues to depict a high level of volatility and trend negatively.
The negative outlooks reflect AM Best’s expectation of continued pressure on risk-adjusted capitalisation over the medium term and ongoing volatility in operating performance metrics.
-- BERNAMA
-- BERNAMA
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