KUALA LUMPUR, March 2 -- AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (excellent) and the Long-Term Issuer Credit Rating of ‘a-’ of General Insurance Corporation of India (GIC Re) India.
These Credit Ratings reflect GIC Re’s balance sheet strength, which AM Best categorised as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.
The negative outlooks reflect GIC Re’s persisting underwriting losses, which have grown in magnitude in recent years and increasingly have begun to hamper overall operating profitability, according to a statement.
While investment operations historically have offset technical losses, deteriorating underwriting results and an increased reliance on investment activities to support overall earnings are placing pressure on AM Best’s current operating performance assessment.
GIC Re’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio is categorised as strongest at fiscal year-end 2019, underpinned by relatively low underwriting leverage, a liquid investment portfolio and retrocession counterparties of high credit quality.
Going forward, AM Best expects elevated new business growth, which is forecast to outstrip the rate of internal capital generation, to result in risk-adjusted capitalisation trending lower, albeit remaining at the strongest level over the near term.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. More details at www.ambest.com.
-- BERNAMA
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