Bermuda insurer downgraded by Best
Reprints
A.M. Best Co. Inc. downgraded Sirius International Insurance Group Ltd. to A- from A on Wednesday citing restrictions placed on the Bermuda-based insurer and reinsurer by its Chinese-owned majority shareholder.
In a statement, the Oldwick, New Jersey-based rating agency said in addition to the downgrade, Sirius had been placed under review “with negative implications.” A- is widely regarded as the lowest rating insurers can have and remain on many brokers’ secure insurers lists.
The downgrade came about two weeks after Sirius’ controlling shareholder, a unit of Shanghai-based China Minsheng Investment Group Corp. Ltd., issued a resolution that could prohibit Sirius from issuing shares and related actions without its approval, the Best statement said.
“This recent development has the potential to affect the company’s business profile adversely and is a strain on management’s time and resources at a time when the company needs to address deterioration in its operating performance,” the statement said.
Sirius reported a $50 million loss for the third quarter of 2019, mainly due to catastrophe-related losses, according to its most recent earnings report.
In addition, the development may signal that China Minsheng could exert control over Sirius.
“The credit quality of CMIG is significantly weaker than that of (Sirius),” the statement said.
