A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of PMG Assurance Ltd. (PMG) (Bermuda).
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]. PMG is a pure captive of Sony and its role is to meet certain global insurance requirements of Sony Group members.
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 with a small amount of employee benefits coverage for Sony employees. The company maintains a large exposure to earthquake-related losses in Japan due to its coverage of Sony’s risks; some of this risk is mitigated through a derivative coverage.
Due to the nature of the relationship between PMG and Sony, changes in Sony’s credit risk have certain impacts on PMG’s ratings. PMG’s success is reliant on Sony’s ability to support its credit risk profile, competitiveness and risk management. The captive continues to be an integral component of Sony’s risk management platform. A.M. Best’s view of third-party credit ratings and market-based credit risk measures of Sony indicates a positive trend, which resulted in revising PMG’s outlook to stable from negative.
Additionally, negative rating pressure might arise if there is any significant downward movement in Sony’s risk profile. Any upward rating movement is predicated on improvement in Sony’s risk profile, coupled with maintenance of PMG’s capital strength.
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 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.
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Fred Eslami, +1-908-439-2200, ext. 5406
Senior Financial Analyst
Gary A. Davis, +1-908-439-2200, ext. 5665
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations