SINGAPORE, Feb 27 (Bernama-BUSINESS WIRE) -- A.M. Best has revised
the outlook to negative from stable for the Long-Term Issuer Credit
Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR)
of B (Good) and the Long-Term ICR of “bbb ” of National Insurance
Company Limited (NIC) (India) (National Insurance). The outlook of the
FSR remains stable.
The Long-Term ICR’s revised outlook is due to the downward trend in National Insurance’s profitability over the past 24 months. Due to increasing underwriting losses, the company’s pretax margin has continued to decline since 2015. As a result, growth in net premium has outpaced retained earnings and contributed to a decline in National Insurance’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the company’s capital structure includes a high proportion of fair value reserves, which leaves its risk-adjusted capitalization vulnerable to capital market volatility.
http://mrem.bernama.com/viewsm.php?idm=28499
The Long-Term ICR’s revised outlook is due to the downward trend in National Insurance’s profitability over the past 24 months. Due to increasing underwriting losses, the company’s pretax margin has continued to decline since 2015. As a result, growth in net premium has outpaced retained earnings and contributed to a decline in National Insurance’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the company’s capital structure includes a high proportion of fair value reserves, which leaves its risk-adjusted capitalization vulnerable to capital market volatility.
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