KUALA LUMPUR, Feb 14 -- AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of ‘bbb’ (Good) of Pacific International Insurance Pty Limited (Pacific) Australia.
The outlook of these Credit Ratings (ratings) is negative, according to a statement.
The ratings reflect Pacific’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
These ratings also factor in a neutral holding company impact from Pacific’s ultimate ownership by Badger Mutual Wealth (Pty) Ltd (the Badger group), an insurance group domiciled in the Republic of South Africa.
Pacific’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was assessed at the very strong level as at fiscal year-end 2021, as measured by Best’s Capital Adequacy Ratio (BCAR).
Since its acquisition by the Badger group in May 2018, Pacific has received a series of capital injections to bolster capital adequacy and support the company’s material change in operational scope.
Notwithstanding this, AM Best expects Pacific’s risk-adjusted capitalisation to decline over the near term as a result of its planned underwriting growth.
AM Best also anticipates that Pacific’s capital adequacy will remain highly sensitive to the successful execution of its business plan, and to the achievement of performance targets and projected capital generation over the medium term.
AM Best views Pacific’s business profile as limited, reflecting the company’s modest scale of operation with a market share below one per cent in the Australia general insurance market.
Whilst Pacific’s insurance portfolio is predominantly motor and motor-related products at present, AM Best expects Pacific’s premium base to grow significantly over the next three years through the launch of pet insurance in New Zealand and due to a partnership with a motor vehicle novated lease distributor in Australia.
More details at www.ambest.com.
-- BERNAMA
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