ENP Newswire - 12 May 2014
Release date- 09052014 - A.M. Best has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and issuer credit rating to 'a-' from 'bbb+' of InterGlobal Insurance Company Limited (InterGlobal) (United Kingdom).
The ratings have been removed from under review with positive implications and assigned a stable outlook.
The removal of the under review status reflects the completion of the acquisition of InterGlobal by Aetna Global Benefits (Bermuda) Limited, whose ultimate parent is Aetna Inc. (Aetna) (Hartford, Connecticut, USA).
In December 2013, the ratings of InterGlobal were placed under review with positive implications, following the announcement of Aetna's intention to acquire the company. On 23 April 2014, Aetna announced the completion of the acquisition, which was consummated by a transfer of shareholding of InterGlobal to Aetna through its Bermudian subsidiary, Aetna Global Benefits (Bermuda) Limited. No other changes occurred, and the integration process is expected to start in the near term.
The upgrading of the ratings reflects the strength of capital and financial wherewithal of Aetna to support InterGlobal if necessary. The acquisition of InterGlobal fits into Aetna's strategy to serve a growing expatriate business and explore other new lines and markets.
InterGlobal's risk-adjusted capitalisation is strong and has improved over the past two years, driven by retained profits and a capital injection in 2011. InterGlobal's technical result improved significantly in 2013 to USD 2.3 million (2012: USD 0.8 million loss) following actions taken by management, which include price increases and non-renewal of large loss-making accounts. InterGlobal's gross premium income increased slightly by 5% to USD 117 million in 2013, in line with expectations.
Downward rating pressure could occur if underwriting profitability were to decline severely and risk-adjusted capitalisation was not replenished to a level commensurate with the rating. There are no upward rating pressures at present.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
This rating announcement has been issued by A.M. Best Europe - Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.
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