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A.M. Best Downgrades Credit Ratings of ERGO Insurance Pte. Ltd

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A.M. Best has downgraded the Financial Strength Rating (FSR) to
B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Ratings
(Long-Term ICR) to "bbb+" from "a-" of ERGO Insurance Pte. Ltd.
(ERGO Insurance) (Singapore). The outlook of the Long-Term ICR has been
revised to negative from stable, while the FSR outlook remains stable.

The ratings reflect ERGO Insurance's balance sheet strength, which A.M.
Best categorizes as strong, as well as its marginal operating
performance, neutral business profile and appropriate enterprise risk
management.

The downgrade reflects a material decline in capital below projections
provided to A.M. Best in January 2018 due to weaker than expected
performance. As a result of its reduced capital size, the company's
risk-adjusted capitalization, as measured by Best's Capital Adequacy
Ratio (BCAR), could experience greater volatility from unexpected events.

The Long-Term ICR outlook revision to negative reflects A.M. Best's
concern with the execution risk related to the ERGO Group AG's
plan to reposition ERGO Insurance in Singapore.

The Long-Term ICR outlook could be revised to stable if the company
demonstrates a trend of positive results. Negative rating actions may
arise from further deterioration in the company's capital due to weak
operating performance. A reassessment of ERGO Insurance' strategic role
as a wholly owned subsidiary of the Munich Reinsurance Company
could also result in negative rating actions.

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 A.M. 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 A.M. 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 A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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