16 February 2021Bermuda analysis

AM Best upgrades long term issuer rating for Sony’s captive PMG Assurance

AM Best has upgraded PMG Assurance Bermuda’s long term issuer credit rating to a+ from a, with its financial strength rating remaining A as before.

PMG is the captive insurance company of Sony and serves a critical role in meeting certain global insurance requirements and providing risk management services to Sony group members, AM Best said. The captive has received a rating enhancement from its parent.

The captive writes predominantly commercial property and marine coverages for Sony and employee benefits coverage for Sony employees outside of Japan. It also writes cyber coverage.

PMG’s strong operating results contribute to surplus growth, which enables the captive to maintain higher net retention levels on its marine business, and has enabled it to add lines of business such as cyber, AM Best said.

The outlook of these ratings is stable.

AM Best said PMG has a very strong balance sheet and a strong operating performance, with a limited business profile and appropriate enterprise risk management.

The captive is susceptible to volatility in earnings due to the low frequency and high severity losses it insures, AM Best noted, but it mitigates its exposures through the use of a comprehensive reinsurance programme.