IFS Capital : News Release by A.M. Best on ECICS Limited's Rating

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General Announcement::News Release by A.M. Best on ECICS Limited's Rating

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General Announcement::News Release by A.M. Best on ECICS Limited's Rating Issuer & Securities

Issuer/ Manager

IFS CAPITAL LIMITED

Securities IFS CAPITAL LIMITED - SG1A35000706 - I49

Stapled Security No

Announcement Details

Announcement Title

General Announcement

Date & Time of Broadcast 27-Feb-2016 10:00:34

Status New

Announcement Sub Title News Release by A.M. Best on ECICS Limited's Rating

Announcement Reference SG160227OTHR0TKG

Submitted By (Co./ Ind. Name) Chionh Yi Chian

Designation Company Secretary

Description (Please provide a detailed description of the event in the box below)

IFS Capital Limited ("IFS") refers to the news release by A.M. Best on the rating of ECICS Limited (a wholly-owned subsidiary of IFS). A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of ECICS Limited but revised the outlook to negative from stable. Please refer to the attached news release by A.M. Best for details.

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27/2/2016

FOR IMMEDIATE RELEASE

CONTACTS: Faith Tan Christopher Sharkey Associate Financial Analyst Manager, Public Relations +(65) 6589 8400, ext. 212 +(1) 908 439 2200, ext. 5159

[e-mail] [e-mail]

Chi Yeung Lok Jim Peavy Senior Financial Analyst Assistant Vice President, Public Relations +(65) 6589 8400, ext. 211 +(1) 908 439 2200, ext. 5644

[e-mail] [e-mail]

A.M. Best Revises Outlook to Negative for ECICS Limited

SINGAPORE, February 26, 2016-A.M. Best has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of ECICS Limited (ECICS) (Singapore).

The revised outlook reflects the decline in the company's operating performance due to weakened demand and competition in ECICS' core business. Since inception, ECICS has focused on construction bond and trade credit insurance, which are small and cyclical segments of the market.

Although ECICS is taking remedial actions by diversifying into general insurance segment, the company is likely to face high implementation risks, which could result in prolonged expense strain and reduced profitability.

Partially offsetting these negative rating factors are the company's favorable risk-adjusted capitalization, and strategies implemented to reduce volatility to capital from large bond claims. This includes new reinsurance arrangements whereby ECICS' net retention on new and inforce business will be substantially reduced. Combined with expected premium growth, this should help to reduce claims volatility over time.

The outlook could be revised back to stable if the company restores balanced and profitable results while achieving its planned premium growth.

Negative rating action could occur if ECICS fails to meet its business plan.

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

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best's Recent Rating Activity web page. A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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