Press Release - AUGUST 10, 2018

A.M. Best Downgrades Credit Ratings of ERGO Insurance Pte. Ltd


CONTACTS:
 Faith Tan
Financial Analyst
+65 6303 5017
faith.tan@ambest.com

Chi-Yeung Lok
Director, Analytics
+65 6303 5018
chi-yeung.lok@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

SINGAPORE - AUGUST 10, 2018
A.M. Best has downgraded the Financial Strength Rating (FSR) to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb+” from “a-” of ERGO Insurance Pte. Ltd. (ERGO Insurance) (Singapore). The outlook of the Long-Term ICR has been revised to negative from stable, while the FSR outlook remains stable.

The ratings reflect ERGO Insurance’s balance sheet strength, which A.M. Best categorizes as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.

The downgrade reflects a material decline in capital below projections provided to A.M. Best in January 2018 due to weaker than expected performance. As a result of its reduced capital size, the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), could experience greater volatility from unexpected events.

The Long-Term ICR outlook revision to negative reflects A.M. Best’s concern with the execution risk related to the ERGO Group AG’s plan to reposition ERGO Insurance in Singapore.

The Long-Term ICR outlook could be revised to stable if the company demonstrates a trend of positive results. Negative rating actions may arise from further deterioration in the company’s capital due to weak operating performance. A reassessment of ERGO Insurance’ strategic role as a wholly owned subsidiary of the Munich Reinsurance Company could also result in negative rating actions.

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 a global rating agency and information provider with a unique focus on the insurance industry.


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AMB# Company Name
086893 ERGO Group AG
091559 ERGO Insurance Pte. Ltd.
085011 Munich Reinsurance Company