LONDON--(BUSINESS WIRE)--A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb+” of InterGlobal Insurance Company Limited (InterGlobal) (United Kingdom). The outlook for both ratings is stable.
The ratings reflect InterGlobal's both strong and supportive level of risk-adjusted capitalisation current and prospectively combined with the improving, though still weak, operating performance. An offsetting factor is its marginal underwriting result.
A relatively significant capital injection from a new shareholder (from the insurance industry) at the end of 2011 boosted InterGlobal’s risk-adjusted capital, which combined with its recent decline in premium income and significant efforts in improving underwriting performance, is expected to remain supportive of its current ratings in the near future. InterGlobal took major actions to improve underwriting profitability including price increases, non-renewal of large loss-making accounts and changes to its internal organisation of underwriting authority. Improving results on an underwriting year basis will be reflected on a financial year basis from 2012 onward, should no major losses happen.
InterGlobal’s gross premium income declined in 2011 by 12% and is expected to be reduced by almost 10% by the close of year-end 2012. This decline is mostly driven by the company’s loss of non-profitable business partially offset by rate increases in existing accounts.
Downward rating pressures are the potential return to very poor underwriting profitability or a material decline in its risk-adjusted capitalisation.
There are no upward rating pressures.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; and “Rating Members of Insurance Groups”. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
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