AM Best Upgrades Credit Ratings Of PMG

January 27, 2019

AM Best has upgraded the Financial Strength Rating to A [Excellent] from A- [Excellent] and the Long-Term Issuer Credit Rating to “a” from “a-” of Bermuda-based PMG Assurance Ltd. The outlook of these Credit Ratings remains stable.

A statement from the ratings agency said, “The ratings reflect PMG’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

“The ratings also reflect PMG’s strategic position as the captive insurance company for the Sony Group, whose ultimate parent is Sony Corporation [Sony] [NYSE: SNE]. PMG is a pure captive of Sony, and its role is to meet certain global insurance requirements and provide risk management services to Sony Group members.

“The rating upgrades reflect the improved credit risk profile of Sony, which has experienced a positive trend over the past several years. Sony has made improvements in terms of its earnings quality, increased cash flow and a significant reduction to debt.

“PMG’s strengths are derived from its underwriting focus, conservative operational strategy and emphasis on risk management controls. PMG writes predominantly commercial property and marine for Sony, and employee benefits coverage for Sony employees.

“PMG’s balance sheet strength is assessed as very strong, as evidenced by its risk-adjusted capitalization, excellent liquidity and conservative investment strategy. PMG’s operating performance continues to be strong, with favorable net income in four of the past five years predominantly from net underwriting income.

“The captive is susceptible to volatility in earnings due to the low frequency and high severity losses it insures; however, PMG mitigates its exposures through the use of a comprehensive reinsurance program.”

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