AM Best has downgraded the Financial Strength Rating (FSR) to B (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating (Long Term ICR) to 'bb+' (Fair) from 'bbb-' (Good) of
The outlook of the Long-Term ICR has been revised to negative from stable, while the outlook of the FSR is stable.
The Credit Ratings (ratings) reflect EFUG's balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and marginal enterprise risk management (ERM).
The Long-Term ICR outlook revision to negative reflects pressure on EFUG's credit fundamentals from heightened economic, financial system and political risk in
The rating downgrades reflect the limited capital buffers available to the company to absorb the impact of increasing country risk in
EFUG has a history of robust operating profitability, with a five-year (2017-2021) weighted average
return on equity of 12.6%, supported by positive underwriting and investment results. The company has generated solid underwriting profits over the same period, with an average combined ratio of 86.6%. Despite competitive pressure on premium rates and higher natural peril losses in recent years, AM Best expects prospective underwriting performance to remain strong.
EFUG has formalised and strengthened its ERM framework and capabilities. However, the company's risk profile has increased recently as a result of the deteriorating risk environment in
This press release relates to Credit Ratings that have been published on AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in
(C) 2022 Electronic News Publishing, source