AM Best


A.M. Best Affirms Credit Ratings of Evergreen Insurance Company Limited


CONTACTS:

Vivian Cheung
Senior Financial Analyst
+852 2827 3421
vivian.cheung@ambest.com

Christie Lee
Director, Analytics
+852 2827 3413
christie.lee@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

HONG KONG - NOVEMBER 17, 2017 08:55 AM (EST)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Evergreen Insurance Company Limited (EICL) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings of EICL are based on its balance sheet strength, which is categorized as strong by A.M. Best, and track record of favorable operating performance. As a pure captive of the Evergreen Group, EICL has built its underwriting portfolio mainly in marine, aviation, property, engineering, motor and other liabilities related to the group’s operations.

EICL’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains at a high level due to a low risk retention strategy relative to its capital and surplus. Underwriting performance has remained favorable, with a low net loss ratio along with minimal distribution costs. In terms of asset quality, EICL invested solely in cash and deposits and an intercompany loan, which generate stable interest income.

Offsetting rating factors include liquidity constraints associated with the intercompany loan, which accounted for approximately one-third of the company’s total assets as of June 30, 2017. The company’s balance sheet strength also is sensitive to a potential increase in credit risk associated with reinsurance receivables related to its sizeable gross aviation risk.

Positive rating actions could occur if the company can strengthen its capitalization and liquidity. Negative rating actions could occur if EICL’s absolute capitalization declines materially or if its risk-adjusted capitalization decreases sharply. Furthermore, the ratings could be impacted if the parent company’s credit profile deteriorates.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


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AMB# Company Name
073684 Evergreen Insurance Company Limited