2013-12-20 17:37:02 -
A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of B- (Fair) and issuer credit ratings of “bb-” Asian Reinsurance Corporation (Asian Re) (Thailand). Both ratings remain under review with developing implications.
The ratings reflect Asian Re's unresolved capitalization issues. The company’s capitalization was significantly eroded by severe losses from the 2011 Thailand flooding. The company announced a plan in June 2012 to infuse additional capital, some of which was accomplished by year-end 2012. However, some other committed shareholders have not injected capital funds in 2013 according to the timeline planned by Asian Re’s management. This shortfall was offset somewhat in 2013, when USD 5.8 million of capital was raised by Asian Re through debt equity swap agreements. However, in
the view of A.M. Best, this amount was not sufficient enough for Asian Re to restore its capitalization to the level maintained prior to the flood losses.
In December 2013, the Cabinet of the Government of Thailand announced the approval of an additional USD 6.822 million capital injection into Asian Re. However, as firm dates from the capital raise from other country members are still pending, the final amount and timing of the capital improvement plan remains uncertain.
The ratings will remain under review until there is more progress on the capital raise or the implementation of other capital improvement plans A.M. Best will continue to monitor the financial condition of Asian Re during the under review period.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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