AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to 'bb' (Fair) from 'bb+' (Fair) and affirmed the Financial Strength Rating (FSR) of B (Fair) of
Concurrently, AM Best has revised the outlooks to negative from stable for these Credit Ratings (ratings).
The ratings reflect CAIL's balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management.
The downgrading of CAIL's Long-Term ICR reflects ratings drag from its parent company,
The revision of the outlooks to negative reflects deteriorating fiscal conditions in
CAIL's balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), and capital consumption is predominantly driven by the asset risk associated with its exposure to domestic assets. With heightening economic, political and financial systems risks in
CAIL is expected to report a five-year (2018-2022) weighted average combined ratio of approximately 92%, with the company's combined ratio expected to deteriorate to marginally below 100% in 2022. Although high inflation and volatility in foreign exchange (FX) rates are expected to pressure prospective underwriting performance, the company is accustomed to operating in turbulent macroeconomic conditions and results are expected to improve in the short term. The company holds surplus assets in
CAIL is among the leading non-life insurers 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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