KUALA LUMPUR, Dec 17 -- AM Best has removed from under review with developing implications and affirmed the credit ratings of Pacific International Insurance Pty Limited (Pacific) Australia.
According to a statement, Pacific has Financial Strength Rating of B++ (good) and the Long-Term Issuer Credit Rating of ‘bbb’, resulting in stable outlook of the ratings.
These ratings were placed under review with developing implications in April, following notification to AM Best of a material change in Pacific’s business plans and prospective scope of operations.
Historically, Pacific operated as a niche insurer underwriting principally general liability and professional indemnity products for the pest control and building inspection industries in Australia and New Zealand.
However, following its acquisition by Badger International (Pty) Ltd (Badger), an insurance group domiciled in the Republic of South Africa, Pacific recently acquired the renewal rights to a sizeable portfolio of existing motor business in Australia, distributed by affiliated underwriting agencies of the Badger group.
These rating actions follow the conclusion of AM Best’s assessment of the impact of this strategic shift on the credit rating fundamentals of Pacific.
Pacific has received a series of capital injections to support the change in operational scope and associated increasing capital requirements arising from the incoming motor portfolio as it is underwritten at renewal by Pacific.
Despite these capital injections, the company’s risk-adjusted capitalisation remains sensitive to a number of factors, including changes in underlying business plan assumptions for future business volumes and underwriting performance.
-- BERNAMA
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