A.M. Best Assigns Ratings to EQ Insurance Company Limited

SINGAPORE--()--A.M. Best has assigned a financial strength rating of B++ (Good) and an issuer credit rating of “bbb+” to EQ Insurance Company Limited (EQ) (Singapore). The outlook assigned to both ratings is stable.

Established in 2007, EQ is a general insurer based in Singapore and a wholly owned subsidiary of Citystate Capital Asia Pte. Ltd. (CCA). EQ is a small participant in terms of market share in the Singapore’s general insurance business.

The assigned ratings consider EQ’s adequate risk-adjusted capitalization, prudent investment portfolio and low underwriting leverage.

EQ’s consistent returns from an investment portfolio comprised mainly of cash holdings has helped to sustain the company’s overall profitability. Additionally, successive capital injection received from its parent company in excess of dividends paid has kept both gross and net underwriting leverage low.

Offsetting rating factors include a limited business profile. As a small participant in a mature market, EQ faces challenges in growing profitably. EQ’s underwriting performance has trailed the general insurance average in Singapore primarily due to a higher than average claims ratio.

Positive rating momentum could result from achieving balanced and improved profitability while reaching projected top-line growth. Negative rating pressure could arise from a deterioration in operating performance due to expansion or a deterioration in its parents’ financial condition.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best Company
Faith Tan
Associate Financial Analyst
+(65) 6589 8400, ext. 212
faith.tan@ambest.com
or
Chi Yeung Lok
Senior Financial Analyst
+(65) 6589 8400, ext. 211
chi-yeung.lok@ambest.com
or
Christopher Sharkey
Manager, Public Relations
+(1) 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
james.peavy@ambest.com

Contacts

A.M. Best Company
Faith Tan
Associate Financial Analyst
+(65) 6589 8400, ext. 212
faith.tan@ambest.com
or
Chi Yeung Lok
Senior Financial Analyst
+(65) 6589 8400, ext. 211
chi-yeung.lok@ambest.com
or
Christopher Sharkey
Manager, Public Relations
+(1) 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
james.peavy@ambest.com