Pacific Int’l Insurance should see better ERM capabilities: AM Best

The insurer’s profile is deemed limited due to its focus on motor coverage and partnerships.

Pacific International Insurance’s premium growth has kept a growth trajectory in recent years, with a majority of the premiums seceded out to reinsurers. Nonetheless, the insurer is projected to have an elevated underwriting growth in the medium term, influenced by pet and travel insurance, AM Best said.

Pacific’s adequate balance sheet strength, moderate operating performance, limited business profile, and appropriate enterprise risk management (ERM) resulted in good ratings. The ratings also consider the neutral impact from its owner, Badger Mutual Wealth a South African insurance group.

Pacific's balance sheet strength is supported by strong risk-adjusted capitalisation, expected to remain robust in the medium term. 

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However, its capital adequacy is sensitive to executing its business plan. 

The company has received AU$37m in capital injections over five years, enhancing financial flexibility. Whilst it depends moderately on reinsurance, this risk is mitigated by the reinsurance panel's good credit quality.

Operating performance is assessed as adequate, showing positive trends in recent years despite initial expenses from investments. Pacific's business profile is limited due to its modest scale, primarily focusing on motor insurance and partnerships. 

Its ERM is deemed appropriate but requires ongoing strengthening to support operational expansion and product diversification.