A.M. Best affirms credit ratings of Oriental India

KUALA LUMPUR, Nov 30 (Bernama) -- A.M. Best -- a global rating agency -- has affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of ‘bbb+’ of The Oriental Insurance Company Limited (Oriental) India.

The outlook of the FSR remains stable while the outlook of the Long-Term ICR remains negative which reflects the continued downside risk on company’s risk-adjusted capitalization and concerns over its underwriting performance, a statement said.

The credit ratings reflect Oriental’s balance sheet strength which A.M. Best categorized as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Oriental’s balance sheet strength remains very strong and is supported by solid risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR). However, its underwriting leverage is low compared with its major non-life insurer peers in India.

The company’s operating ratio has improved to 105 per cent in the 12 months to 31 March 2018 compared with 137 per cent the year before. It is supported by a lower combined ratio of 119 per cent as it reduced loss ratios in several major lines of business and expense ratios.

A revision of the Long-Term ICR outlook to stable could occur if Oriental can substantially improve and sustain its underwriting performance while maintaining its risk-adjusted capitalization.  More details on www.ambest.com.

-- BERNAMA