AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of MS First Capital Insurance Limited (MSFC) (Singapore).

The Credit Ratings (ratings) reflect MSFC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. In addition, the ratings factor in rating enhancement from Mitsui Sumitomo Insurance Company Limited, for whom the ultimate parent is MS&AD Insurance Group Holdings, Inc.

The positive outlooks reflect an improvement in MSFC’s balance sheet strength fundamentals, supported by the company’s prudent capital management strategy and robust stress testing framework. The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level as at year-end 2023 and is expected to be maintained at this level over the medium term. Strong and consistent internal capital generation has enabled the company to grow its capital size considerably over the past ten years, with shareholders’ equity reaching SGD 1.2 billion as at year-end 2023 from SGD 411.8 million as at year-end 2013. AM Best views MSFC’s investment portfolio as conservative, consisting mainly of cash, term deposits and high-quality bonds. Notwithstanding, the company maintain a high reliance on reinsurance to support the underwriting of large risks and to manage its accumulation of catastrophe exposures, although credit risk is mitigated partially by the good credit quality of its reinsurance panel.

AM Best views MSFC’s operating performance as strong, as evidenced by its consistently favourable return-on-equity (ROE) ratio. In 2023, the company achieved an ROE ratio of 12.1%, supported by good performance in underwriting and investment operations. The company’s underwriting discipline and technical expertise in core lines of business and markets have enabled its achievement of stable and robust underwriting returns. In addition, investment results, arising mainly from interest income, also continue to contribute positively to the company’s overall profitability.

AM Best assesses MSFC’s business profile as neutral. The company is a dominant non-life insurer in Singapore, with strong branding and technical expertise. MSFC’s underwriting portfolio is well-diversified by geography, whereby a large volume of overseas business is sourced from various markets within Asia. MSFC maintains long-standing relationships with brokers and reinsurers, which continue to support the company’s access to quality business in markets. Additionally, the company continues to receive business referrals from affiliates of its parent group.

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 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 the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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