AM Best revises Pacific's outlooks to negative

KUALA LUMPUR, Dec 11-- Global credit rating agency, AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of ‘bbb’ of Pacific International Insurance Pty Limited (Pacific) Australia.

The Credit Ratings (ratings) reflect Pacific’s balance sheet strength, which AM Best categorises as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

These ratings also factor in a neutral holding company impact from Pacific’s ultimate ownership by Badger International (Pty) Ltd (Badger), an insurance group domiciled in the Republic of South Africa. According to a statement, the negative outlooks reflect the heightened sensitivity of Pacific’s balance sheet strength and operating performance assessments to execution of the company’s growth plan. AM Best considers the company’s latest business plan to present high levels of execution risk, and failure to successfully achieve it could weaken Pacific’s operating performance and risk-adjusted capitalisation materially. However, AM Best expects Pacific’s prospective risk-adjusted capitalisation to deteriorate notably in the coming years as a result of the further substantial premium growth targeted by the company.

AM Best also anticipates capital adequacy to remain highly sensitive to the successful execution of the company’s business plan, and to the achievement of performance targets and projected capital generation over the medium term. More details at www.ambest.com. -- BERNAMA