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 DSI receives from
DSI's risk-adjusted capitalisation remained at the strongest level as of year-end 2022, as measured by Best's Capital Adequacy Ratio (BCAR). DSI's total capital and surplus decreased by 10% to
The overall operating performance of DSI is mainly driven by its investment performance. While the company's investment result was unfavourable amid more challenging capital market conditions in 2022, its five-year average investment performance and average return-on-equity ratio of 1.3% during 2018 to 2022 remained supportive of the adequate operating performance assessment.
As a small to medium-sized player in
Negative rating actions could occur if there is a material deterioration in DSI's risk-adjusted capitalisation or its absolute size of capital and surplus, due to redemption of the preference shares without replacement with similar or more permanent capital, coupled with material investment losses or a significant increase in risk exposure. Negative rating actions also are possible if there is a sustained unfavourable trend in operating performance, due to large equity investment losses. In addition, if DSFH's credit profile deteriorates materially or if DSFH reduces the level of support it provides to DSI, negative rating actions also may occur. Positive rating actions could arise if DSI demonstrates successful implementation of its business plan, which will enhance its competitive advantage of sourcing profitable business and market position.
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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