SINGAPORE, Nov 15 (Bernama-BUSINESS WIRE) -- AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of MS First Capital Insurance Limited (MSFC) (Singapore).
The Credit Ratings (ratings) reflect MSFC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. In addition, the ratings factor in rating enhancement from Mitsui Sumitomo Insurance Company Limited, for whom the ultimate parent is MS&AD Insurance Group Holdings, Inc.The positive outlooks reflect an improvement in MSFC’s balance sheet strength fundamentals, supported by the company’s prudent capital management strategy and robust stress testing framework. The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level as at year-end 2023 and is expected to be maintained at this level over the medium term. Strong and consistent internal capital generation has enabled the company to grow its capital size considerably over the past ten years, with shareholders’ equity reaching SGD 1.2 billion as at year-end 2023 from SGD 411.8 million as at year-end 2013. AM Best views MSFC’s investment portfolio as conservative, consisting mainly of cash, term deposits and high-quality bonds. Notwithstanding, the company maintain a high reliance on reinsurance to support the underwriting of large risks and to manage its accumulation of catastrophe exposures, although credit risk is mitigated partially by the good credit quality of its reinsurance panel.
AM Best views MSFC’s operating performance as strong, as evidenced by its consistently favourable return-on-equity (ROE) ratio. In 2023, the company achieved an ROE ratio of 12.1%, supported by good performance in underwriting and investment operations. The company’s underwriting discipline and technical expertise in core lines of business and markets have enabled its achievement of stable and robust underwriting returns. In addition, investment results, arising mainly from interest income, also continue to contribute positively to the company’s overall profitability.
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