AM Best reaffirms PGA Sompo’s financial strength

MANILA, Philippines – Global credit rating agency AM Best has reaffirmed its ratings for PGA Sompo Insurance Corp., the joint venture between Prudential Guarantee and Assurance Inc. and Sompo Holdings (Asia) Pte. Ltd.

AM Best has assigned PGA Sompo a financial strength rating of B+ (good) and a long-term issuer credit rating (ICR) of “bbb-” (good). A “good” AM Best ICR rating indicates a company’s ability to meet its financial obligations.

PGA Sompo, led by its chairman Robert Coyiuto Jr., is one of only two non-life insurance companies in the Philippines rated by AM Best.

PGA Sompo president and CEO Fumihiko Harada called the AM Best credit rating as a “proud achievement that validates the financial strength and credit worthiness of PGA Sompo.”

“Definitely, the high rating lends prestige to our company as we continue to expand our business partnerships for both corporations and government organizations,” Harada said.

The value of credit ratings may be likened to that of an audit opinion—meaning it provides reasonable assurance to the public, even if this may rest on the fairness of how a company presents its financial statements.

Credit ratings are reviewed periodically. Insurance companies must prove why their assigned ratings should be retained, upgraded or, in some cases, be spared from getting downgraded.

Amid risks, an insurance company’s credit ratings imply its capacity to settle claims, in turn making it preferable to investors. Simply, credit ratings provide an additional layer of assurance for policyholders.

AM Best in a statement said it considers PGA Sompo’s approach to risk management to be appropriate, and that the company also “benefits from risk management oversight and governance” from Sompo.

The PGA Sompo alliance is recognized as a breakthrough partnership in the Philippine insurance industry. Sompo, which traces its roots to 1887 as Japan’s first fire insurance firm, is presently one of the largest property and insurance companies in the country.