AM Best Assigns Credit Ratings to Stronghold Insurance Company, Inc.

SINGAPORE--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of B (Fair), a Long-Term Issuer Credit Rating of “bb” (Fair) and a Philippines National Scale Rating of a.PH (Excellent) to Stronghold Insurance Company, Inc. (Stronghold) (Philippines). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Stronghold’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).

Stronghold’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to be at least at the strong level over the medium term. The company benefits from good financial flexibility, whereby shareholders’ equity growth has been bolstered by full earnings retention and historical capital injections. In addition, the company has a low-to-moderate risk investment portfolio with the majority of assets allocated to cash, deposits and Philippines government bonds. However, the company’s capital adequacy is sensitive to potential losses arising from severe natural catastrophes, although the risk is mitigated partially by its reinsurance programme. The reinsurance panel is generally of good credit quality although some exposure to counterparties that are non-rated or of weaker credit quality remains.

AM Best assesses Stronghold’s operating performance as adequate, with a five-year average return on equity of 5.7% (fiscal years 2020-2024). The company demonstrated a steady but marginal improvement in combined ratios over recent periods, in part supported by strong business growth and generally benign loss experience. In addition, the company’s investment income, mainly from interest and rental income, is viewed to be stable and supportive of operating earnings. Operating earnings in 2025 remained positive, supported by consistent underwriting and investment results.

AM Best assesses Stronghold’s business profile as limited. The company is ranked amongst the top 10 largest non-life insurance companies in the Philippines, with a market share of approximately 4%, based on 2024 gross premium written. The company’s underwriting portfolio is viewed to be moderately diversified by line of business with key lines including fire, surety and motor. In recent years, premium growth has benefited significantly from the underwriting of large fire insurance policies.

AM Best assesses Stronghold’s ERM as marginal. The profile of some key risks is viewed to exceed its risk management capabilities. A key offsetting factor includes the company’s moderate to high exposure to catastrophe risk, in particular for losses arising from severe typhoons and floods. Notwithstanding, AM Best expects Stronghold’s risk management capabilities to continue to evolve and be aligned with its risk profile over time.

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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AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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