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FOR IMMEDIATE RELEASE
SINGAPORE - OCTOBER 21, 2016 12:14 PM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Singapore Reinsurance Corporation Limited (Singapore Re) (Singapore). The outlook of these Credit Ratings (ratings) is stable.
The rating affirmations reflect Singapore Re’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, and its profitable operating performance.
Singapore Re’s risk-adjusted capitalization is supported by low underwriting leverage, good asset quality and high liquidity. Its high quality investment portfolio, which amounts to over three times net earned premiums, has been an important contributor to overall results and capital generation over the years.
Offsetting rating factors include the difficulties Singapore Re faces as a small player to maintain its underwriting margin due to expense ratio pressures, as regulatory hurdles and competitive pressures continue to increase. In 2015, the company experienced weakening of its underwriting margin due to an increase in its expense ratio.
Positive rating action is unlikely in the near term. Downward rating pressure could occur from sustained low earnings due to lower-than-expected investment results.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.