OREANDA-NEWS. A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of First Capital Insurance Limited (First Capital) (Singapore). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect First Capital’s favorable risk-adjusted capitalization, strong operating performance and good business profile. The company’s underwriting leverage has trended downward with steady capital growth. Tapping into its strong business network, First Capital also has been adept at seeking opportunities abroad where it generates approximately half of its gross written premiums. The company’s good profitability continues to be supported by favorable reinsurance commission income and investment income arising from a large investment portfolio.

Offsetting rating factors include an increasingly difficult operating environment with more large competitors entering First Capital’s markets. Coupled with regulations that favor cessions to domestic counterparties in some of these markets, finding profitable growth opportunities could be challenging. Finally, while First Capital continues to benefit from the strengths of its key management team, institutionalizing these strengths could help enhance the company’s growth potential in the long run.

Positive rating actions are unlikely at present. Negative rating actions could result from a weakening of the company’s business profile or a material decline in risk-adjusted capitalization.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.