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FOR IMMEDIATE RELEASE
SINGAPORE - APRIL 12, 2019 11:41 AM (EDT)
AM Best has placed under review with developing implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Pacific International Insurance Pty Limited (Pacific) (Australia).
These Credit Rating (rating) actions follow Pacific informing AM Best of a forthcoming material change to its business plans and scope of operations over the near term. Historically, Pacific has operated as a small and niche insurer underwriting principally liability products for the pest control and building inspection industries in Australia and New Zealand. However, with effect from July 2019, Pacific is expected to commence underwriting a sizeable portfolio of existing motor business in Australia, arising from affiliated underwriting agencies, which also are held by Badger International (NZ) LP. This motor business was written previously by a third-party insurer but going forward, at point of renewal, will be underwritten by Pacific. This strategic change, coupled with Pacific’s wider intentions to grow its new product offerings in Australia and New Zealand rapidly, are likely to result in a material change to the company’s operations over the near term.
The ratings have been placed under review with developing implications while AM Best conducts a full assessment on these strategic changes and considers the impact on Pacific’s prospective rating fundamentals. AM Best will seek to hold further discussions with the company regarding these changes, as well as obtain and review revised business plans and financial forecasts. Among other factors, AM Best will need to assess the impact of forecast business growth on the company’s prospective risk-adjusted capitalization and underwriting performance. Execution risk arising from the revised business strategy and expansion plans also will be considered.
AM Best expects to resolve the under review status following the conclusion of its assessment.
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 AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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