SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of First Capital Insurance Limited (First Capital) (Singapore). The outlook for both ratings remains stable.
The ratings consider First Capital’s favorable baseline capitalization, strong operating performance and good business profile. Capital leverage measures have trended downward with consistent capital growth. Management has been effective in profitably diversifying First Capital’s sources of underwriting results, while growing premiums and results. This reflects the strength of the management’s business network and expertise in identifying underwriting opportunities across Asia and lines of business. Profitability ratios are significantly supported by favorable reinsurance commission income and First Capital’s large investment portfolio.
Offsetting rating factors include potential volatility in First Capital’s risk-adjusted capitalization following a major catastrophe event. While the company’s capital position would be protected by reinsurance, high reinsurance asset leverage could cause a significant drop in risk-adjusted capitalization. Finally, while First Capital has benefitted from the strengths of its key management, institutionalizing these strengths could help to reduce the company’s key person risks.
The company is well-positioned at its current rating level.
A higher than expected increase in reinsurance asset risk following one or multiple large catastrophe events could result in negative rating pressure.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
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