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AM Best Revises Outlooks to Positive for PGA Sompo Insurance Corporation


SINGAPORE–(BUSINESS WIRE)–#insuranceAM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of PGA Sompo Insurance Corporation (PGA Sompo) (Philippines).

These Credit Ratings (ratings) reflect PGA Sompo’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The outlook revisions to positive are based on AM Best’s expectation of PGA Sompo’s continued solid operating performance over the medium term, while maintaining its strong balance sheet strength.

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PGA Sompo’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which remained at the strongest level at year end 2021, as measured by Best’s Capital Adequacy Ratio (BCAR). Notwithstanding this, the company has a small absolute capital base which increases the sensitivity of capital adequacy to changes in performance and stressed scenarios. PGA Sompo has a conservative investment strategy, with invested assets principally consisting of cash, deposits and fixed-income securities. The company has very high reinsurance usage and dependence, with over 95% of premiums ceded to reinsurers; albeit a majority is placed with its minority shareholder, Sompo Japan Insurance Inc. (Sompo), which is viewed to present a very low level of counterparty credit risk. Despite being a minority shareholder, Sompo provides both implicit and explicit support to PGA Sompo, which is viewed to create additional financial flexibility.

AM Best assesses PGA Sompo’s operating performance as adequate. The company has demonstrated a track record of sound operating profitability over the past five years with an average return-on-equity ratio of 8.4% (2017-2021). Underwriting results over this period were driven by reinsurance commission income generated on ceded business, with higher commissions in recent years having supported improved results. The company’s net loss ratio increased in 2021 compared with the prior year due to higher claims from a catastrophe event, Typhoon Odette (Rai), although the impact on overall earnings is limited by the company’s very low premium retention ratio. Investment income has remained a stable contributor to operating profits, with a five-year average net investment yield of 3.0% (2017-2021).

AM Best views PGA Sompo’s business profile as limited. Despite the company benefiting from its affiliation with Sompo, which supports strong access to Japan-related risks in the Philippines, PGA Sompo is considered a small non-life insurer. Based on gross written premium, the company had a domestic market share of approximately 3% in 2021. In addition, the company’s underwriting portfolio is considered concentrated by line of business and geography.

AM Best considers the company’s ERM approach as appropriate given the size and complexity of its current operations. PGA Sompo also is viewed to benefit from a level of risk management oversight and support from the Sompo group.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Susan Tan
Financial Analyst
+65 6303 5023

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Michael Dunckley, CFA
Director, Analytics
+65 6303 5020

Al Slavin
Communications Specialist
+1 908 439 2200, ext. 5098

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