2014-02-26 18:17:03 -
A.M. Best has upgraded the financial strength rating to B (Fair) from B- (Fair) and the issuer credit rating to “bb” from “bb-” of Asian Reinsurance Corporation (Asian Re) (Thailand). Both ratings have been removed from under review with developing implications and assigned a positive outlook.
The rating upgrades reflect Asian Re’s improved capitalization after the Thailand government’s THB 219 million (USD 6.8 million) capital injection on February 10, 2014. Together with debt equity swap agreements (with five Thailand insurers completed during the second half of 2013) and expected improvement in fiscal year 2013 underwriting results, Asian Re has partially restored its capitalization, which was significantly eroded by severe losses from the 2011 Thailand flooding.
In 2014, Asian Re aims to
further strengthen its capitalization through capital injections from other member countries and debt equity swap agreements with other insurance creditors.
Partially offsetting these positive rating factors is the uncertainty surrounding both the timing and the amount of the upcoming capital improvement plans.
Future positive rating actions could occur if Asian Re successfully executes its capital improvement plans and achieves favorable operating results. Negative rating actions could occur if the company’s risk-adjusted capitalization deteriorates due to unfavorable operating results or from adverse development in the company’s loss reserves for the 2011 Thailand flooding.
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.
This rating announcement has been issued by A.M. Best Asia-Pacific Limited, which 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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