KUALA LUMPUR, Nov 18 (Bernama) -- AM Best has downgraded the financial strength rating to A- (excellent) from A (excellent) and the long-term issuer credit rating to “a-” (excellent) from “a” (excellent) of Bermuda’s Evergreen Insurance Company Limited (EICL).
These credit ratings (ratings) which have a stable outlook, reflect EICL’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
In a statement, the global credit rating agency said the ratings also reflected the parental support EICL received from Evergreen International S.A. and Evergreen International Corporation in terms of capital, business development, operations and risk management.
The rating downgrades reflect changes to EICL’s operating performance and business profile assessment, based on the company’s latest business plan to cease underwriting new business starting from mid-May 2024.
AM Best revised the company’s operating performance assessment to adequate from strong given that its top-line and bottom-line results are projected to drop materially in the next two years, while its business profile assessment revised to limited from neutral due to the planned reduction in business scale.
As measured by Best’s Capital Adequacy Ratio, EICL’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2023.
As a pure captive of Evergreen Group, EICL’s in-force underwriting portfolio primarily consists of marine, aviation and property risks related to the group’s operations.
The company has historically been a beneficiary of support from its shareholders and the wider parent group. AM Best expects EICL’s shareholders will remain committed and continue to render support to the company during the run-off period in terms of capital, risk management and operations, if needed.
-- BERNAMA
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