SINGAPORE, Dec 13 (Bernama-BUSINESS WIRE) -- AM Best has affirmed the Financial Strength Rating of B++ (Good), the Long-Term Issuer Credit Rating of “bbb+” (Good) and the India National Scale Rating (NSR) of aaa.IN (Exceptional) of The New India Assurance Company Limited (New India) (India). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect New India’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favourable business profile and marginal enterprise risk management (ERM). In addition, the ratings factor in the neutral impact from New India’s ultimate majority ownership by the Government of India.New India’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which remained at the strongest level at fiscal year-end 2024, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best views that the majority of New India’s reinsurance assets are of good credit quality. In addition, the investment portfolio is of moderate risk. Although a large portion of investments are held in domestic government and corporate bonds, which are well-rated on the local scale, the balance sheet remains subject to volatility arising from the company’s allocation to domestic equity investments.
AM Best assesses New India’s operating performance as adequate. The company has reported positive operating results on a consolidated basis over the past five years, with an average return-on-equity ratio of 2.9% (fiscal years 2020–2024). In the fiscal year ending 31 March 2024, the company reported a deterioration in underwriting losses largely due to catastrophe losses and higher claims arising from its health and motor insurance. Robust investment income, including interest and dividend income, as well as realised gains from the sale of equity investments, continues to provide a sizable contribution to overall earnings. Despite remedial measures, challenging market conditions are likely to constrain the company’s underwriting results over the medium term, albeit overall operating results are expected to remain profitable.
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