AM Best has elevated the Financial Strength Rating of MS First Capital Insurance Limited (MSFC) in Singapore to A+ (Superior) from A (Excellent) and its Long-Term Issuer Credit Rating to “aa-” (Superior) from “a+” (Excellent). The outlooks have also been revised to stable from positive, reflecting the company’s robust balance sheet, strong operating performance, and effective enterprise risk management.
The upgrade is attributed to MSFC’s improved balance sheet strength, bolstered by a prudent capital management strategy. The company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, was at its strongest at the end of 2024 and is expected to remain stable. Over the past decade, MSFC has significantly increased its capital size, with shareholders’ equity reaching S$1.4 b by the end of 2024, up from S$501.1m in 2014.
MSFC’s operating performance is considered strong, with a return-on-equity ratio of 14.2% in 2024, supported by solid underwriting and investment results. The company’s conservative investment portfolio, primarily consisting of cash, term deposits, and high-quality bonds, contributes to its financial stability. Despite a high reliance on reinsurance for large risks, the credit risk is mitigated by the good credit quality of its reinsurance partners.
As a dominant non-life insurer in Singapore, MSFC maintains a neutral business profile with a well-diversified underwriting portfolio across Asia. The company benefits from strong branding, technical expertise, and long-standing relationships with brokers and reinsurers, enhancing its access to quality business. The ratings also reflect the support from its parent company, Mitsui Sumitomo Insurance Company Limited, part of the MS&AD Insurance Group Holdings, Inc.
