SINGAPORE--(BUSINESS WIRE)--A.M. Best has revised the outlooks to stable from positive, and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of New India Assurance Company Limited (New India) (India).
While the company remains profitable overall, its pretax margin has weakened, as underwriting performance for the 12 months to March 2016 and the six months to September 2016 has deteriorated and fallen behind its projections.
The Credit Ratings (ratings) reflect New India’s strong risk-adjusted capitalization, which is supported by low underwriting leverage. In addition, New India’s adjusted capital and surplus was the largest among direct non-life insurers in India, standing at INR 304 billion (USD 4.6 billion) as of 31 March 2016. However, the company’s capital position is exposed to stock market volatility, as fair value reserves accounted for a large portion of its capital position.
Positive rating momentum could result from New India showing a consistent and improving trend in its underwriting and operating performance while maintaining its favorable risk-adjusted capitalization.
Conversely, negative rating actions could occur if the company’s risk-adjusted capitalization declines to a level below A.M. Best’s expectations or if its operating performance deteriorates significantly.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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