A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of PMG Assurance Ltd. (PMG) (Bermuda). The outlook for both ratings is negative.
The ratings reflect PMG’s excellent capitalization, historically strong operating performance and strategic position as the captive insurance company for the Sony Group, whose ultimate parent is Sony Corporation (Sony) [NYSE: SNE]. The ratings also reflect PMG’s role as a single parent captive of Sony, the support provided by its exponentially larger parent and the resources available to it if necessary.
The company’s strengths are derived from its underwriting focus, long-standing customer relationships and conservative operating strategy. PMG writes mostly proportional property and marine reinsurance business and ceased writing life business effective Jan. 16, 2011. However, PMG currently added a small amount of employee benefits coverage. These factors are offset by PMG’s large exposure to earthquake-related losses in Japan and potential constraints caused by Sony’s modest credit risk profile given PMG’s dependence on Sony. The captive continues to be an integral component of Sony’s risk management platform.
Rating factors that could lead to PMG’s outlook being revised to stable include long-term consistently strong operating performance, maintaining strong risk-adjusted capital levels and executing its business plan in conjunction with overall improvement in Sony’s rating.
A.M. Best could downgrade the company’s ratings or revise the outlooks if its Best’s Capital Adequacy Ratio (BCAR) score declines significantly, operating performance and risk profile deteriorate or its parent’s credit ratings profile deteriorates.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and 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.
This press release relates to rating(s) 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.
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Fred Eslami, 908-439-2200, ext. 5406
Senior Financial Analyst
Gary A. Davis, 908-439-2200, ext. 5665
Assistant Vice President
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations