AM Best Places Credit Ratings of Pacific International Insurance Pty Limited Under Review with Developing Implications
This motor business was written previously by a third-party insurer but going forward, at point of renewal, will be underwritten by Pacific.
AM Best has placed under review with developing implications the
Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit
Rating of “bbb” of Pacific International Insurance Pty Limited (Pacific)
(Australia).
These Credit Rating (rating) actions follow Pacific informing AM Best of
a forthcoming material change to its business plans and scope of
operations over the near term. Historically, Pacific has operated as a
small and niche insurer underwriting principally liability products for
the pest control and building inspection industries in Australia and New
Zealand. However, with effect from July 2019, Pacific is expected to
commence underwriting a sizeable portfolio of existing motor business in
Australia, arising from affiliated underwriting agencies, which also are
held by Badger International (NZ) LP. This motor business was written
previously by a third-party insurer but going forward, at point of
renewal, will be underwritten by Pacific. This strategic change, coupled
with Pacific’s wider intentions to grow its new product offerings in
Australia and New Zealand rapidly, are likely to result in a material
change to the company’s operations over the near term.
The ratings have been placed under review with developing implications
while AM Best conducts a full assessment on these strategic changes and
considers the impact on Pacific’s prospective rating fundamentals. AM
Best will seek to hold further discussions with the company regarding
these changes, as well as obtain and review revised business plans and
financial forecasts. Among other factors, AM Best will need to assess
the impact of forecast business growth on the company’s prospective
risk-adjusted capitalization and underwriting performance. Execution
risk arising from the revised business strategy and expansion plans also
will be considered.
AM Best expects to resolve the under review status following the
conclusion of its assessment.
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 Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
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