KUALA LUMPUR, Oct 23 (Bernama) -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of The New India Assurance Company Limited (New India).
Additionally, AM Best in a statement said it has assigned the India National Scale Rating (NSR) of aaa.IN (Exceptional) to New India, while the outlook of these credit ratings (ratings) is stable.
The ratings reflect New India’s balance sheet strength, which AM Best assessed as very strong, as well as its adequate operating performance, favourable business profile and marginal enterprise risk management.
In addition, the ratings factor in the neutral impact from New India’s ultimate majority ownership by the Government of India.
New India’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which remained at the strongest level in fiscal-year 2023, as measured by Best’s Capital Adequacy Ratio.
AM Best views the company’s investment portfolio to have moderate risk. Although a large portion of investments are held in domestic government and corporate bonds, which are well-rated on the local scale, the balance sheet remains subject to volatility arising from its allocation to domestic equity investments.
With New India’s operating performance assessed as adequate, the company has reported positive operating results on a consolidated basis over the last five years, with an average return-on-equity ratio of 2.7 per cent (fiscal years 2019–2023).
Robust investment incomes, including interest and dividend incomes, as well as realised gains from the sale of equity investments, provides a sizable contribution to overall earnings.
The rating agency expects challenging market conditions to constrain the company’s underwriting results over the medium term, albeit overall operating results are expected to remain profitable.
New India’s favourable business profile assessment reflects its market position as the largest non-life insurer in India by gross premiums written, and its underwriting portfolio is moderately diversified by lines of business and distribution channels, although with an elevated concentration in health insurance.
-- BERNAMA
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