KUALA LUMPUR, Feb 24 (Bernama) -- AM Best has revised Australia’s Pacific International Insurance Pty Limited (Pacific) outlooks to stable from negative and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good).
The Credit Ratings (ratings) reflect Pacific’s balance sheet strength, which AM Best assessed as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
According to AM Best in a statement, these ratings also factor in a neutral impact from Pacific’s ultimate owner, Badger Mutual Wealth (Pty) Ltd, an insurance group domiciled in South Africa.
The revised outlooks reflect an improving trend in Pacific’s balance sheet strength, supported by internal capital generation and capital injections totalling A$9 million during the fiscal year (FY) 2023 ending June 30. (A$1 = RM3.02)
The company’s balance sheet strength assessment is underpinned by risk-adjusted capitalisation, which was at the strong level in FY2022, as measured by Best’s Capital Adequacy Ratio.
The capital injections, conservative investment strategy and continued positive underwriting results over the medium term, are expected to stabilise its risk-adjusted capitalisation at the strongest level.
AM Best viewed Pacific’s operating performance as adequate and the company is demonstrating a positive trend in its underwriting performance after reporting losses in FY2020 and FY2021.
In addition, the rating agency assessed Pacific’s business profile as limited, reflecting its relatively modest scale of operations.
Whilst Pacific’s net retained insurance portfolio is predominantly motor and motor-related products at present, AM Best expects Pacific’s premium base to grow modestly in its other lines of business such as pet insurance and binder partners, as well as a partnership with a motor vehicle novated lease insurance distributor in Australia.
-- BERNAMA
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