AM Best Confirms Credit Rating of Evergreen Insurance Company Limited

Hong Kong – ()–AM Best has affirmed Evergreen Insurance Company Limited (EICL), Bermuda’s financial strength rating of A (excellent) and long-term issuer credit rating of ‘a’ (excellent). The outlook for these credit ratings is stable.

The rating reflects the strength of EICL’s balance sheet, which AM Best rates as very strong, strong operating results, a neutral business profile and good corporate risk management.

EICL’s risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR), continues to be among the highest, with low net underwriting leverage, a highly conservative and liquid investment portfolio, and comprehensive reinvestment. Backed by an insurance policy. The company’s capital and surplus have shown a gradual downward trend over the past three years due to dividend payments to its parent companies (Evergreen International SA and Evergreen International Corp.), but BCAR remains at a solid level. increase. AM Best expects the company to maintain a sufficient buffer in risk-adjusted capital to support its risk profile over the next three years.

EICL has demonstrated a track record of strong underwriting and operating performance with Group related businesses. Given its high-severity and low-frequency risk profile, which primarily includes the marine and aviation businesses, the company cedes more than half of its premiums to a panel of financially sound reinsurers, with low retention rates. maintained. While the company’s net claims performance has been very good over the past few years, gross losses have fluctuated due to several major loss events in ships and air hulls. EICL faced investment headwinds in 2021 from a cash and deposit-only investment portfolio. Going forward, AM Best expects underwriting results, especially for marine businesses, to continue to be the main driver of the final results.

As a pure captive of the Evergreen Group, EICL’s underwriting book primarily consists of shipping, aviation and property risks related to the Group’s operations. EICL remains an integral part of the group. Its risk management is well embedded in the Group’s risk framework and is deemed adequate to support its risk profile.

Negative rating action could occur if a company performs significantly worse and no longer supports a strong valuation, or if there is a material capital or dividend payment leading to a significant reduction in EICL’s risk-adjusted capital. There is a nature. Furthermore, any material deterioration in the creditworthiness of the ultimate parent company, Evergreen International SA, could have a negative impact on the ratings.

AM Best continues to be the leading rating agency for alternative risk transfer entities, with over 200 such vehicles rated worldwide. For current Best credit ratings and independent data on the captive and alternative risk transfer insurance market, please visit: www.ambest.com/captive.

Ratings are communicated to the rated entity prior to issuance. Ratings were not revised after that notice unless otherwise stated.

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