AM Best Upgrades Credit Ratings of PMG Assurance Ltd.

AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of PMG Assurance Ltd. (PMG) (Bermuda). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect PMG’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

The ratings also reflect PMG’s strategic position as the captive insurance company for the Sony Group, whose ultimate parent is Sony Corporation (Sony) [NYSE: SNE]. PMG is a pure captive of Sony, and its role is to meet certain global insurance requirements and provide risk management services to Sony Group members. The rating upgrades reflect the improved credit risk profile of Sony, which has experienced a positive trend over the past several years. Sony has made improvements in terms of its earnings quality, increased cash flow and a significant reduction to debt.

PMG’s strengths are derived from its underwriting focus, conservative operational strategy and emphasis on risk management controls. PMG writes predominantly commercial property and marine for Sony, and employee benefits coverage for Sony employees. PMG’s balance sheet strength is assessed as very strong, as evidenced by its risk-adjusted capitalization, excellent liquidity and conservative investment strategy. PMG’s operating performance continues to be strong, with favorable net income in four of the past five years predominantly from net underwriting income. The captive is susceptible to volatility in earnings due to the low frequency and high severity losses it insures; however, PMG mitigates its exposures through the use of a comprehensive reinsurance program.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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.

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

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