AM Best Affirms Ratings Of Evergreen Insurance
A.M. Best has affirmed the financial strength rating of A [Excellent] and the issuer credit rating of “a” of Evergreen Insurance Company Limited [EICL] [Bermuda]. The outlook for both ratings is stable.
The ratings agency said, “The ratings reflect EICL’s strong risk-adjusted capitalization, its contribution to the risk management of the Evergreen Group and a favorable track record of underwriting results.
“As a pure captive of the Evergreen Group, EICL is the group’s risk management platform and underwrites risks in marine, aviation, property, engineering, motor and other liability in relation to group operations. The ratings also recognize EICL’s prudent investment strategy and sound liquidity position.
“Offsetting rating factors include EICL’s declining trend in its absolute capitalization over the past five years, primarily due to dividend payments made to the group exceeding the profits it generated despite no dividend was paid in 2014. The company expects growth in the number of insured vessels and aircrafts for the Evergreen Group, which will require adequate capital support at EICL.
“The company’s Best’s Capital Adequacy Ratio [BCAR] is sensitive to a single catastrophic aviation loss scenario, which could give rise to substantial credit or dispute risk associated with a potentially large reinsurance recoverable relative to its capital size.
“Upward rating movement is unlikely in the near term. Downward rating movement could occur if the declining trend in absolute capitalization continues or there is a sharp decline in EICL’s risk-adjusted capitalization.”
