AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of PVI Insurance Corporation
AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of
The ratings reflect PVI Insurance’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). In addition,
The ratings of
The latest rating actions follow a period of further shareholding changes, which has seen the HDI group regain majority ultimate ownership of PVI Holdings. As a result of this, AM Best continues to afford rating enhancement to
PVI Insurance’s balance sheet strength assessment is underpinned by risk-adjusted capitalisation that is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best views the company’s investment portfolio to be of moderate risk, with a majority allocation to cash and term deposits, albeit some exposure to higher-risk assets including affiliated private investments. Other balance sheet considerations include the company’s high reinsurance usage and dependence, as well as its high dividend payout ratio over recent years, although retained earnings combined with periodic capital contributions have remained sufficient to support business growth.
PVI Insurance’s underwriting results have improved over recent years and it has a five-year average return-on-equity ratio of 14.5% (2016-2020). Robust underwriting performance has been supported by profitable commercial and industrial business and ongoing remediation measures in motor and personal accident insurance. Loss experience also improved during the first nine months of 2021, due in part to COVID-19-induced community lockdowns and social restriction measures. In addition, the company’s investment income has consistently supported overall earnings, although returns may be constrained by low interest rates over the near term.
The company’s business profile is assessed as neutral.
AM Best considers the company’s ERM approach as appropriate given the size and complexity of its current operations. Going forward, AM Best expects
The positive outlooks reflect AM Best’s expectation that the company will continue to demonstrate a trend of favourable underwriting and operating performance over the near to medium term. In addition, AM Best expects PVI insurance to maintain its importance and integration with HDI V.a.G. over the intermediate term.
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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Source: AM Best
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