AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings of 'a-' of
The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in
The ratings reflect DTRIC's balance sheet strength, which AM Best categorises as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management. The ratings also consider the impact of implicit and explicit support given by
AM Best's assessment of DTRIC's balance sheet strength as strong is attributed to its strong levels of risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR). Also reflected in the company's balance sheet strength assessment is DTRIC's high quality of capital, strong liquidity and high quality reinsurance panel.
In terms of operating performance, DTRIC has consistently produced positive net income over the past three years, but most of its key operating metrics have continued to lag its peers' averages. For fiscal year 2019, the company's underwriting losses increased, owing primarily to a change in the ceding arrangement for certain Japanese interest abroad business, which led to a three-percentage point increase in its expense ratio. As a result, the company's FY 2019 combined ratio increased to 104.0% from 101.5% in the prior year.
DTRIC mainly specialises in underwriting workers' compensation, personal automobile insurance and a number of other commercial line products in
The stable outlooks reflect AM Best's expectation that DTRIC will maintain positive operating results over the short to medium term, supported by stable revenue growth and a combined ratio that AM Best expects to improve gradually over time.
Negative rating actions could occur if there is significant deterioration in DTRIC's risk-adjusted capitalisation due to unexpected capital repatriation, or if its profitability falls below AM Best's expectation due to competitive pressure or adverse claims experience.
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 media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in
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