AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of 'a-' (Excellent) of
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect DSI's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect the parental support from
DSI's risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), remains at the strongest level. The company's equity investments exposure is higher than its peers after a large capital injection from DSFH in 2017. The company reported a material decline of
The overall operating performance of DSI is driven by its investment performance. The five-year investment gains are supportive of the adequate operating performance assessment, but the nature of equity investments exposes DSI's year-to-year net profits/losses and even capitalisation to potential volatility.
As a small to medium-sized player in
Negative rating actions could occur if there is a material deterioration in the company's risk-adjusted capitalisation or absolute size of capital and surplus, for example, due to redemption of the preference shares without reissuance coupled with material investment losses or a significant increase in risk exposure. Negative rating actions are also possible if there is a sustained unfavourable trend in operating performance, a material deterioration in DSFH's credit profile, or if DSFH reduces the level of support it provides to DSI.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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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