A.M. Best Revises Outlooks to Stable for ERGO Insurance Pte. Ltd.. Ltd. (ERGO Insurance) (Singapore).
ERGO Insurance’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains solid and continues to support a balance sheet strength assessment of strong, despite a downward trend since 2014. Significant capital repatriation in the form of high dividend payments has reduced the company’s capital and liquidity position. A.M. Best expects ERGO Insurance’s risk-adjusted capitalization to remain strong in the near term, supported by reduced premium volumes.
ERGO Insurance’s operating performance continues to be unfavorable as a result of elevated losses and expense ratios, and its performance has fallen behind its peers since 2016. A new management team has been tasked with returning the company to profitability in the medium term.
Positive rating actions could occur if ERGO Insurance achieves consistent, above-industry average profitability while meeting its growth targets. Negative rating actions may occur in the event of further deterioration in the company’s operating performance or business profile. An unfavorable reassessment of ERGO Insurance’s strategic role in the group also could result in negative rating actions.
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