A.M. Best Revises Outlook to Negative for Ratings of Leadway Assurance Company Limited [Health & Beauty Close – Up]
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A.M. Best
According to a release, the negative outlook on Leadway's ratings reflects the ongoing uncertainty associated with the performance of its aggressive investment asset allocation with large equity and unquoted securities holdings; hence, the subsequent impact on its risk-adjusted capitalisation. The ratings also consider Leadway's exposure to the high political, economic and financial system risks associated with its operation in
Leadway's risk-adjusted capitalisation has weakened in 2011, due to the decline in equities revaluation reserves owing to substantial reductions in stock prices in the capital market. Going forward,
Leadway's net income after taxes decreased by 25.6 percent to
Leadway benefits from a good business profile within its local market as an established writer of non-life retail lines and larger commercial risks. Additionally, the company continues to grow its life insurance book. In 2011, the company's total gross premiums increased by 44 percent to
Positive rating actions would occur if Leadway strengthens its risk-adjusted capitalisation and continues to decrease its large equity holdings and investments in unquoted securities.
Negative rating actions could occur if the company experiences further deterioration in its risk-adjusted capitalisation below a level considered supportive of the current ratings. Deterioration in operating performance also would be seen negatively.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best
More information:
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