KUALA LUMPUR, Oct 11 -- AM Best has revised the outlook to negative from stable and affirmed the Financial Strength Rating of A+ (superior) and the Long-Term Issuer Credit Rating of ‘aa-’ of Tokio Marine Pacific Insurance Limited (TMPI), Guam.
The negative outlooks reflect the deteriorating trend in the company’s operating performance, as well as the expected reduction in its market share and increase in operating performance volatility following the non-renewal of the Guam Government’s health plan account.
Meanwhile, these credit ratings reflect TMPI’s balance sheet strength, which AM Best categorised as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
Historically, TMPI’s major source of income has come from the Guam Government’s health plan, which is subject to annual renewal through a bidding process. This account contributed to a significant portion of TMPI’s total revenue in 2018.
However, there has been a continuously deteriorating trend in the account’s loss ratio and underwriting performance in recent years, which is attributable mainly to intense rate competition and rising medical inflation.
AM Best will continue to monitor TMPI’s business and risk profile, its underwriting and operating performance, as well as the management team’s mitigation actions toward rising expense pressure.
AM Best is a global credit rating agency and information provider with exclusive focus on the insurance industry. More information on http://www.ambest.com.
-- BERNAMA
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