A.M. Best Affirms Credit Ratings of MS First Capital Insurance Limited

SINGAPORE--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of MS First Capital Insurance Limited (MSFC) (Singapore). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect MSFC’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains solid. Capital and surplus has increased steadily through growth in retained earnings while underwriting leverage remains low. MSFC’s investment portfolio also has become more conservative through a reallocation of its equity exposure to fixed income.

In terms of underwriting performance, the company has performed well compared with its peers, benefiting from favorable reinsurance profit commission income. Its combined ratio has averaged below 80% for the past five years, while return on equity has averaged above 10%. MSFC also has been adept at seeking opportunities abroad where it generates approximately half of its gross premiums, providing some geographic diversification.

An offsetting rating factor is the continued price erosion in certain business lines. The company responded by reducing premiums but has so far been able to keep its underwriting margins at a strong level. Additionally, while MSFC continues to benefit from the strengths of its key management team, institutionalizing these strengths could enhance the company’s growth potential in the long run.

Positive rating actions are unlikely in the near term. Negative rating actions could result from a weakening of the company’s business profile or operating performance.

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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

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A.M. Best

Wesley Chia, +65 6303 5018

Financial Analyst

wesley.chia@ambest.com

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Christopher Sharkey, +1 908 439 2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

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Chi-Yeung Lok, +65 6303 5016

Director, Analytics

chi-yeung.lok@ambest.com

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Jim Peavy, +1 908 439 2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com

Source: A.M. Best