AM Best places Papua New Guinea-based CGI under review with negative implications

KUALA LUMPUR, March 25 (Bernama) -- AM Best has downgraded the Financial Strength Rating to C+ (marginal) from C++ (marginal) and the Long-Term Issuer Credit Rating to ‘b-’ from ‘b+’ of Capital General Insurance Company Limited (CGI) Papua New Guinea (PNG).

Additionally, the global insurance rating company has placed these credit ratings under review with negative implications.

CGI is a subsidiary of Capital Insurance Group Limited (CIGL), which is also domiciled in PNG.

The rating downgrades reflect a deterioration in AM Best’s view of CGI’s balance sheet strength fundamentals following a control failure that is expected to lead to a significant deterioration in risk-adjusted capitalisation for the year-end 2018, as measured by Best’s Capital Adequacy Ratio.

The under review with negative implications status reflects the uncertainty that remains around CGI’s year-end 2018 financial position, pending finalisation of audited financial statements, as well as prospective expectations.

In order to resolve the under review status, AM Best plans to conduct a full assessment of medium-term balance sheet strength and operating performance fundamentals of CGI and CIGL.

AM Best will also consider any action being taken by the company to bolster prospective risk-adjusted capitalisation.

-- BERNAMA