AM Best Affirms Credit Ratings of PMG Assurance Ltd.
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Insights
The affirmation of PMG Assurance Ltd.'s Financial Strength Rating and Long-Term Issuer Credit Rating by AM Best underscores the company's robust financial health and operational efficiency. The 'A' rating reflects a very strong balance sheet, characterized by high levels of liquidity, conservative investment strategies and a strong capital adequacy as indicated by the BCAR. Investors might consider the stable outlook as a sign of consistent performance, which could be seen as a positive indicator for Sony's financial ecosystem, given PMG's role as its captive insurance entity.
From a financial perspective, PMG's low underwriting leverage and its ability to consistently outperform industry averages in combined and operating ratios highlight operational excellence and prudent risk management. This performance is especially significant in the context of the insurance industry, where underwriting discipline directly correlates with profitability and long-term solvency. PMG's comprehensive reinsurance program demonstrates a strategic approach to mitigate potential volatility in earnings, which is particularly relevant for investors concerned with risk exposure in Sony's financial operations.
PMG's strategic role as Sony's only captive insurance company, as noted by AM Best, is integral to its enterprise risk management (ERM) strategy. This relationship allows PMG to provide tailored insurance solutions to Sony, which can lead to more efficient risk management and cost savings. The emphasis on PMG's keen underwriting expertise and integrated risk management controls with Sony indicates a sophisticated approach to ERM that aligns with industry best practices.
For stakeholders, PMG's specialized coverage in areas such as cyber risk and directors and officers insurance is indicative of an adaptive insurance strategy that aligns with emerging risks in the global business environment. This adaptability is crucial as it reflects PMG's commitment to evolving its risk management practices to meet the changing needs of its parent company, potentially reducing Sony's overall risk profile and enhancing its competitive advantage.
The rating enhancement provided by Sony Group Corporation to PMG highlights the interconnectedness between parent companies and their captive insurance subsidiaries. It is important for stakeholders to understand that the financial strength and ratings of a captive are often influenced by the parent company's overall financial health. In this case, Sony's backing is a critical factor in PMG's rating, reflecting confidence in the parent company's ability to support its captive in adverse scenarios.
Moreover, the focus on PMG's commercial property, marine, cyber risk and employee benefits insurance offerings for Sony and its affiliates underscores the importance of captive insurance companies in providing customized insurance solutions. This specialized approach can result in more favorable underwriting results, as captive insurers like PMG can directly align their risk appetite with the specific needs and risk profiles of their parent companies, unlike traditional insurers who must cater to a broader market.
The ratings reflect PMG’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM). The company also receives rating enhancement provided by its ultimate parent, Sony Group Corporation (Sony) [NYSE: SONY].
The rating reflects PMG’s risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), while maintaining its excellent liquidity, low underwriting leverage and conservative investment strategy in support of the very strong balance sheet strength assessment. Strong operating performance reflects PMG’s consistent results in its combined and operating ratios that continue to outperform industry averages, stemming from favorable underwriting results and profitability with a low underwriting expense structure. While the captive is susceptible to volatility in earnings due to the low frequency and high severity losses for the risks it insures, PMG has a comprehensive reinsurance program in place for all coverage provided to its parent to mitigate its exposures. PMG writes commercial property, marine, directors and officers, cyber risk and employee benefits insurance for Sony and its affiliates.
The ratings also benefit from PMG’s strategic role as Sony’s only captive insurance company. As an integral component of Sony’s ERM, PMG’s role is to meet the global insurance requirements of the parent while also providing risk management services to Sony group members. PMG exhibits strengths that are derived from its keen underwriting expertise and emphasis on risk management controls, which are well-integrated with those of its parent.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in
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 Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Chul Lee
Senior Financial Analyst
+1 908 882 2005
chul.lee@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Daniel Teclaw
Director
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daniel.teclaw@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
FAQ
What are the Financial Strength Rating and Long-Term Issuer Credit Rating of PMG Assurance Ltd.?
What does the rating reflect about PMG Assurance Ltd.?
Who is the ultimate parent of PMG Assurance Ltd. and what rating enhancement does it provide?
What types of insurance does PMG Assurance Ltd. write for Sony and its affiliates?
What role does PMG Assurance Ltd. play as Sony's captive insurance company?
