AM Best Comments on Credit Ratings of Sirius International Insurance Group, Ltd. and Its Main Rated Subsidiaries

AM Best has commented that the Long-Term Issuer Credit Ratings (Long-Term ICRs) of "bbb" of Sirius International Insurance Group, Ltd. (SIIG) (Bermuda) SG and Sirius International Group, Ltd. (Bermuda); the Financial Strength Ratings of A (Excellent) and the Long-Term ICRs of "a" of Sirius Bermuda Insurance Company Ltd. (Bermuda), Sirius International Insurance Corporation (publ) (Sweden) and Sirius America Insurance Company (New York, NY) are unchanged following the triggering of cross-default provisions on USD 800 million bonds issued by subsidiaries of SIIG's ultimate parent, China Minsheng Investment Group Corp., Ltd (CMIG).

As commented in February 2019, AM Best considers that, following its listing on the Nasdaq in November 2018, SIIG has safeguards in place that shield the company's financial strength from potential adverse parental influence, including the risk of capital extraction to a level that would be detrimental to its operations. In particular, SIIG complies with the Nasdaq listing requirements and has implemented solid governance arrangements, comprising establishing a largely independent board of directors. Out of seven board members, five are independent non-executive directors, one is SIIG's CEO and one represents a CMIG's affiliate. The independence of SIIG's board of directors is protected by a shareholders' agreement, which prevents the removal of any director, other than for cause, until November 2021.

Furthermore, SIIG and its rated subsidiaries operate in jurisdictions considered to have strong regulatory oversight, notably Bermuda, the United States, Sweden and the United Kingdom.

In AM Best's opinion, these elements insulate SIIG and its subsidiaries from the debt and liquidity difficulties of CMIG. However, the current situation at CMIG constitutes a significant test of these safeguard mechanisms, and should they prove less effective than anticipated, AM Best would promptly review the ratings of SIIG and its rated subsidiaries. Rating actions could also be triggered should there be a deterioration in SIIG's rating fundamentals due to the reputational risk associated with CMIG. A change in control of SIIG would also lead AM Best to review the ratings.

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 Understanding 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.

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