A.M. Best Affirms Ratings of AES Global Insurance Company
February 10 2016 - 5:29PM
Business Wire
A.M. Best has affirmed the financial strength rating of
B+ (Good) and the issuer credit rating of “bbb-” of AES Global
Insurance Company (AGIC) (Burlington, VT). The outlook for both
ratings is stable.
The rating affirmations reflect AGIC’s adequate risk-adjusted
capitalization, consistently favorable operating performance and
sound risk management capabilities. Also supporting the ratings is
a favorable business plan that is used as a basis for the rating’s
profitability and liquidity metrics.
Partially offsetting these positive rating factors are exposure
to large losses due to the policy limits offered, limited market
scope/business profile, product mix and dependence on third parties
for processing, servicing and administration.
Additionally, the ratings recognize the AGIC’s excellent
business position and relationship with its parent, AES
Corporation (AES Corp.) [NYSE:AES], a global power company that
owns a diverse and growing portfolio of electricity generation and
distribution businesses operating in 18 countries. AGIC insures the
global property and business interruption coverage for AES Corp.,
its subsidiaries and affiliates in partnership with AIG Europe
Limited and Zurich Global Limited. Somewhat offsetting these
positive rating factors is the company’s sole dependency on the
parent company’s business opportunities for its growth
prospects.
AGIC has consistently demonstrated profitable net operating
income in each of the last 10 years as a result of favorable
underwriting experience and investment income. Over the past five
years, AGIC has exhibited significant growth in total assets and
policyholders’ surplus, despite annual dividend payments to its
parent/sole shareholder. Nonetheless, A.M. Best will closely
monitor performance of AGIC against its stated operating plan.
The ratings further consider the extensive experience and level
of commitment on the part of its parent, whose management
incorporates the captive as a core element in the overall risk
management program of AES Corp. and utilizes the captive as an
integral part in this process. AES Corp. continually evaluates the
use of AGIC for other risk management objectives of the group as
those arise.
The company’s ratings are not expected to be upgraded or its
outlook revised within the near term as its operating performance
and capital position have already been considered in A.M. Best’s
ratings process. Conversely, any material adverse deviations with
regard to management, earnings, capitalization or risk profile
could potentially undermine the stability of the company’s ratings.
In addition, deterioration in the credit profile of AES Corp. could
impact AGIC’s ratings.
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.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2016 by A.M. Best Company,
Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20160210006643/en/
Alexander Sarfo, 908-439-2200, ext. 5779Senior
Financial Analystalexander.sarfo@ambest.comorGary A Davis,
908-439-2200, ext. 5665Assistant Vice
Presidentgary.davis@ambest.comorChristopher Sharkey,
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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