ข่าวประชาสัมพันธ์Uncategorized

Asia Capital Reinsurance Group Pte. Ltd. ‘A-‘ Rating Affirmed With Stable Outlook

          SINGAPORE (S&P Global Ratings) Dec. 19, 2017--S&P Global Ratings affirmed its 'A-' local currency long-term financial strength and issuer credit ratings on Asia Capital Reinsurance Group Pte. Ltd. (ACRG). The outlook is stable. ACRG is a Singapore-based reinsurer. 
          We affirmed the ratings because we expect ACRG to maintain its extremely strong capital adequacy and improve its underwriting performance over the next two years. The reinsurer's high retrocession usage and efforts to de-risk its investment portfolio through increasing allocation of higher-rated bonds in exchange of equities underpin its extremely strong capital position. However, the modest size of ACRG's overall capital continues to leave the reinsurer more vulnerable to single-event losses than large global peers, limiting the strength of its capital. 
          ACRG's operating performance remains a credit weakness compared with other regional reinsurers. Competitive pressures, costs associated with the reinsurer's restructuring, operations, and reinsurance, and the uncertainties around shareholding changes will continue to stress its already weak operating performance in 2016 and 2017. 
          The recent announcement by ACRG to move forward with its business under its existing ownership will afford stakeholders a degree of stability and allow management to focus on executing its business strategy. The management is also committed to improving its underwriting performance and tightening expenses. We expect ACRG's premiums to grow modestly in 2018-2019 and its operating performance to improve gradually over the next few years. 
          The stable outlook reflects our view that ACRG's competitive position will remain stable and its underwriting performance will improve over the next 24 months. We also expect ACRG to maintain its very strong capital and earnings position during this time through a selective growth strategy and prudent reinsurance utilization. 
          We could lower the ratings on ACRG if: 
          - Underwriting performance does not improve in line with management expectations; or
          - Capital adequacy deteriorates to significantly below our benchmark for the extremely strong category. This could arise from a significantly higher-risk investment strategy causing the reinsurer's risk position to deteriorate, increasing its capital adequacy requirements; unforeseen catastrophe losses outside the group's risk tolerances; or a rapid growth in riskier products or markets.

          We consider an upgrade to be unlikely over the next two years. We may raise the ratings if ACRG's operating performance is stronger than peers' for a sustainable period, which could lead us to revise our assessment of the company's competitive position.