AM Best assigns negative outlook to Sirius
Rating agency AM Best has assigned a negative outlook to the financial strength rating and the issuer credit rating of Sirius International Insurance Group.
This is just days after Bermuda-based White Mountains Insurance Group completed the sale of Sirius to a subsidiary of CM International Holding, the Singapore-based investment arm of China Minsheng Investment Corp.
On July 27, 2015, the rating agency placed Sirius’ ratings under review with negative implications in response to the company’s public disclosure of the agreement.
“The assignment of the negative outlooks reflects AM Best’s concerns that the financial and operating profiles of Sirius may deteriorate over time following the change in ownership,” said the rating agency.
It added that China Minsheng Investment’s credit profile is viewed as weaker than that of White Mountains.
The rating agency also affirmed the financial strength rating and the issuer credit ratings of the Sirius Group, which it said reflects its expectation that Sirius’ strategy will remain unaffected.
AM Best said: “The company is expected to maintain its good business profile, strong risk-adjusted capitalisation, conservative investment portfolio and disciplined underwriting approach.
“Sirius also is expected to retain its current management team, have an independent board of directors and be run autonomously from CMI. Failure of Sirius to demonstrate its strong independence from CMI, or any material departure from its business plans, could trigger a negative rating action.”
