A.M. Best Co. has assigned a financial strength rating of “B++” (Good) and an issuer credit rating of “bbb” to UK-based Interglobal Insurance Company Limited (IIC) with a stable outlook.
“The ratings reflect the strong risk-adjusted capitalization, low loss ratio and volatility of the business that will be written by IIC,” said Best. “Offsetting factors are the company’s modest size and business position.” Best also indicated that IIC’s initial capital of $32.5 million and likely future retained earnings “will provide IIC with a strong risk adjusted-capitalization.”
Best said it “believes that IIC’s future financial performance will be good based on the performance of the existing account written by InterGlobal Limited (a managing general agency) (IL). This account is comprised exclusively of international private Medical insurance, and it will now be written by IIC.”
The rating agency forecasts a net loss ration of between 55 and 60 percent. “However,” Best continued, “the relatively small size of the underwritten portfolio combined with exposures to some war zones may result in further increases in combined ratio during the early years of the operations.”
Although Best indicated that it “believes IIC’s operating expenses are likely to be high, the company is expected to maintain a combined ratio below 100 percent, supporting underwriting profits from 2008. While A.M. Best believes IIC may not achieve its initial objectives for premium volumes, the maximum likely levels have been factored into analysis, and the company’s anticipated performance has been extensively stress tested.”
Best also noted that it “believes that IIC will benefit from the profile of the InterGlobal brand in the Middle East and Asian markets developed by IL. IIC will continue to develop the existing IL portfolio of international private medical insurance. Nevertheless, business volumes are expected to be modest with gross premiums written likely to be below $30 million in 2007 in the company’s first year of operation, but may potentially exceed 60 million in 2008.”
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