A.M. Best has downgraded the financial strength rating of Evergreen Insurance Company (EICL), located in Bermuda from “A (Excellent)” to “A- (Excellent)”.
The long-term issuer credit rating also dropped from “a” to “a-”, however the outlook of the credit rating remains stable.
EICL is a pure captive of the Evergreen Group and is the group’s risk management platform. It underwrites risks in marine, aviation, property, engineering, motor and other liability in relation to group operations.
The ratings downgrade reflects the reduced risk-adjusted capitalisation due to a dividend payment made in 2016, which exceeded the total net income it generated over the past three fiscal years.
According to A.M. Best, positive rating action is “unlikely in the near term” but negative rating action could happen if “EICL’s absolute capitalisation declines materially or if its risk-adjusted capitalisation further decreases sharply”.
