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AM Best Revises Issuer Credit Rating Outlook to Stable for ERGO Insurance Pte. Ltd.

September 29, 2021 GMT


AM Best has revised the Long-Term Issuer Credit Rating (Long-Term ICR) outlook to stable from negative and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of ERGO Insurance Pte. Ltd. (ERGO Insurance) (Singapore). The outlook of the FSR is stable.

The ratings reflect ERGO Insurance’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating enhancement from the company’s ultimate parent, Munich Reinsurance Company (Munich Re or the Munich Re group). ERGO Insurance is a wholly owned subsidiary of ERGO Group AG, which is the primary insurance arm of Munich Re.

The revision of the Long-Term ICR outlook to stable from negative follows reduced volatility and pressure on the company’s balance sheet strength and operating performance fundamentals. Prospectively, AM Best expects that ERGO Insurance’s balance sheet strength will remain underpinned by risk-adjusted capitalisation at least at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). Whilst the company is expected to continue to face headwinds in achieving its targeted turnaround strategy due to persisting competitive market conditions and the COVID-19 pandemic, its underwriting and operating results are expected to exhibit improvement over the medium term.


AM Best assesses ERGO Insurance’s balance sheet strength as strong. Despite operating losses over a number of years having materially eroded the company’s shareholders’ equity, financial support from the Munich Re group has aided to bolster capital adequacy. Other balance sheet considerations include the company’s high reinsurance usage and dependence, albeit premium retention is expected to gradually trend upward going forward. In addition, the company continues to benefit from a conservative investment strategy and ongoing strong financial flexibility provided by the Munich Re group.

AM Best views the company’s operating performance as marginal. Despite a notable improvement in the company’s loss ratio over recent years, as it has sought to reprice and/or non-renew underperforming business, the combined ratio has remained pressured as a result of reduced business scale, which has driven the expense ratio higher. Whilst investment operations have contributed positively to overall earnings, technical results have led to pre-tax operating losses in each year since 2016. A program of remedial action continues to be implemented by the company’s management in conjunction with parent group support, with a target of returning the company to a position of technical and operating profitability over the medium term.


AM Best views ERGO Insurance’s business profile as limited. The company is a non-life insurer in Singapore, with a market share of approximately 1%, based on 2020 gross written premium. The company’s business portfolio continues to exhibit line of business and geographical concentration.

The company receives rating enhancement from its ownership and integration with the Munich Re group. ERGO Insurance also benefits from implicit and explicit support from the Munich Re group, including recent and planned capital injections, as well as reinsurance protection.

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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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CONTACT: Kanika Thukral

Senior Financial Analyst

+65 6303 5025

kanika.thukral@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comMyles Gould

Senior Director, Analytics

+65 6303 5020

myles.gould@ambest.comJim Peavy

Director, Communications

+1 908 439 2200, ext. 5644




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PUB: 09/29/2021 12:02 PM/DISC: 09/29/2021 12:02 PM