The ratings reflect First Net’s favorable risk-adjusted capitalization and improved risk management practices. The ratings also recognize the operating support from its affiliate, Moylan’s
First Net maintains solid risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is supportive of its current ratings. Furthermore, First Net continues to improve its risk management practices.
Partially offsetting these positive rating factors are First Net’s catastrophe exposure, volatile underwriting performance and relatively high expense ratio.
The company’s net catastrophe exposure relative to its capital size is high, exposing the company to higher capital volatility. In addition, the company’s expense ratio has remained high mainly due to the high cost of reinsurance protection and acquisition expenses paid to MIU, which performs various operational functions for First Net.
Positive rating actions could occur if the company further improves its risk management practices and reduces potential capital volatility in relation to its catastrophe exposure. Negative rating actions could occur if First Net’s operating performance deteriorates, resulting in substantial decline in its risk-based capitalization level.
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.
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Moungmo Lee, +65-6589-8412
Managing Director, Analytics
Manager, Public Relations
Director, Public Relations