KUALA LUMPUR, Sept 18 -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of B++ (good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of ‘bbb+’ of ERGO Insurance Pte Ltd (ERGO Insurance) Singapore.
The outlook of the FSR is stable, while the Long-Term ICR outlook is negative, according to a statement.
ERGO Insurance’s Credit Ratings reflect its balance sheet strength, which AM Best categorises as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
The ratings also factor rating enhancement from its ultimate parent, Munich Reinsurance Company (Munich Re or the Munich Re group). ERGO Insurance is a wholly owned subsidiary of ERGO Group AG (ERGO Group), the primary insurance arm of Munich Re.
ERGO Insurance’s balance sheet strength assessment is underpinned by risk-adjusted capitalisation that was categorised as strongest in 2019, as measured by Best’s Capital Adequacy Ratio.
Despite operating losses over the past few years having materially eroded the company’s shareholders’ equity, financial support from the Munich Re group has helped ERGO Insurance maintain capital adequacy at an appropriate level.
AM Best views ERGO Insurance’s business profile as limited. The company is a non-life insurer in Singapore, with a market share of approximately one per cent, based on 2019 gross written premium.
The negative outlook on the Long-Term ICR reflects AM Best’s expectation of continued pressure on the company’s operating performance and balance sheet strength fundamentals over the near term.
-- BERNAMA
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