AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of PMG Assurance Ltd. (PMG) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect PMG’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The ratings also reflect PMG’s 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 and provide risk management services to Sony Group members.
PMG’s strengths are derived from its underwriting focus, conservative operational strategy and emphasis on risk management controls, which are integrated with those of its parent. PMG writes predominantly commercial property and marine coverages for Sony, and employee benefits coverage for Sony employees outside of Japan. PMG’s continued strength of positive growth has allowed for the captive insurer to keep higher net retention levels on its marine business, as well as begin participating in new lines of business such as cyber. PMG’s balance sheet strength is assessed as very strong, as evidenced by its strongest level of risk-adjusted capitalization, excellent liquidity and conservative investment strategy. PMG’s operating performance continues to be strong, with favorable net income in four of the past five years driven predominantly by net underwriting income. The captive is susceptible to volatility in earnings due to the low frequency and high severity losses it insures; however, PMG mitigates its exposures through the use of a comprehensive reinsurance program.
AM 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.
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