Press Release - NOVEMBER 30, 2018

A.M. Best Affirms Credit Ratings of First Net Insurance Company


CONTACTS:
 Yizhou Hong
Financial Analyst
+852 2827 3426
yizhou.hong@ambest.com

Jason Shum
Associate Director, Analytics
+852 2827 3424
jason.shum@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

HONG KONG - NOVEMBER 30, 2018
A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of First Net Insurance Company (First Net) (Guam). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect First Net’s balance sheet strength, which A.M. Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

First Net maintains solid risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company benefits from stable business distribution through its affiliate, Moylan’s Insurance Underwriters, Inc. However, given First Net’s small capital size and premium scale, it is exposed to expense pressure, as well as potential volatility in underwriting results and risk-adjusted capitalization from large catastrophe events. The company mitigates these risks through a conservative reinsurance strategy and a high quality reinsurer panel.

Other positive rating factors include First Net’s conservative investment portfolio, and financial flexibility owing to support from the Moylan family. Other offsetting rating factors include a high dependency on reinsurance, as well as the catastrophe-exposed and competitive market in Guam.

Positive rating actions could occur if First Net demonstrates sustained improvement and a consistent trend in operating performance for an extended period, contributing to surplus growth.

Negative rating actions could occur if there is significant deterioration in the company’s operating performance, or if there are material capital or dividend payouts that lead to a substantial decline in its risk-adjusted capitalization.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.


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AMB# Company Name
013110 First Net Insurance Company