A.M. Best Affirms Ratings of ERGO Insurance Pte. Ltd.

SINGAPORE--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of ERGO Insurance Pte. Ltd. (ERGO Insurance) (Singapore). The outlook for both ratings is stable.

The ratings consider ERGO Insurance’s adequate risk-adjusted capitalization, prudent investment portfolio and operating performance.

ERGO Insurance’s operating performance has been good with contributions from underwriting and investment profit. Effective cycle management of the motor business has kept underwriting results stable and in line with Singapore’s non-life market. Over the medium term, its acquisition by ERGO International AG (ERGO group) could support ERGO Insurance’s market position and provide growth opportunities.

Risk-based capitalization, as measured by Best’s Capital Adequacy Ratio, is adequate to support its current ratings despite a high dividend payout, as management is cautious about business growth in the current market environment.

Offsetting rating factors include the company’s limited business profile and a difficult operating landscape, especially for small participants in the market. At present, ERGO Insurance relies significantly on agents to generate business. As a new member of the ERGO group, the company is exploring potential growth opportunities through other distribution channels.

The company is well-positioned for its ratings. Negative rating actions may arise from a significant deterioration of the company’s operating results or risk-adjusted capitalization from expansion initiatives.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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A.M. Best Company

Faith Tan, +(65) 6589 8400, ext. 212

Associate Financial Analyst

[email protected]

or

Chi Yeung Lok, +(65) 6589 8400, ext. 211

Senior Financial Analyst

[email protected]

or

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

Manager, Public Relations

[email protected]

or

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

Assistant Vice President, Public Relations

[email protected]

Source: A.M. Best Company