SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of Asia Capital Reinsurance Group Pte. Ltd. (Asia Capital Re) (Singapore) and its subsidiary, Asia Capital Reinsurance Malaysia Sdn. Bhd (ACRM) (Malaysia). A.M. Best also has affirmed the Long-Term ICR of “bbb-” of the holding company, ACR Capital Holdings Pte. Ltd. (ACR Holdings) (Singapore). The outlook of these Credit Ratings (ratings) is negative.
Asia Capital Re’s ratings reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). Asia Capital Re’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains solid and is supported by low underwriting leverage, as well as good asset quality.
ACRM’s ratings reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM, as well as the support it receives from its parent, Asia Capital Re. ACRM’s balance sheet strength remains supported by significant quota-share retrocession to its parent. Both companies also share certain services and infrastructure.
The negative outlooks reflect Asia Capital Re’s record of varying and unprofitable underwriting performance. Management has taken remedial actions to improve its underwriting margins, and unaudited interim results as of September 2017 showed an underwriting profit. Nevertheless, A.M. Best remains concerned about execution risk and it remains to be seen if the improving performance can be maintained.
ACR Holdings’ Long-Term ICR reflects the standard notching from Asia Capital Re, its primary operating entity.
Further negative actions regarding Asia Capital Re could arise from deterioration in operating performance. A revision to a stable outlook could occur if Asia Capital Re achieves sustained underwriting profitability while meeting its planned premium targets.
Further negative actions regarding ACRM could arise if the company’s business profile weakens or if the support provided by Asia Capital Re diminishes.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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