STABLE OUTLOOKS OF NEW INDIA REVISED TO NEGATIVE -- AM BEST 

KUALA LUMPUR, Feb 14 -- Global credit rating agency AM Best has revised the outlooks to negative from stable for New India Assurance Company Limited (New India) India.

The negative outlooks reflect New India’s recent track record of poor underwriting performance, which has fallen short of its own projections for several years. In the 12-month period ending March 2019, New India’s combined ratio increased considerably to 124 per cent from 113 per cent.

In the same statement, the agency has also affirmed the Financial Strength Rating of A- (excellent) and the Long-Term Issuer Credit Rating of ‘a-’ for the company.

These Credit Ratings reflect New India’s balance sheet strength, which AM Best categorised as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.

New India’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio is categorised as strongest, underpinned by the company’s low underwriting leverage, adequate reinsurance supports and strong financial flexibility.

AM Best views New India’s operating performance as adequate given its track record of overall profitability between fiscal-years 2015 and 2019. During this period, the company delivered an average return on equity of 3.4 per cent and an average adjusted operating ratio of 92 per cent.

While the company has generated sufficient investment income to offset its unfavourable technical results, AM Best is concerned with the company’s weak underwriting performance. If the magnitude of underwriting losses persists or deteriorates further, AM Best may lower its assessment level of New India’s operating performance.

More details at www.ambest.com.

-- BERNAMA