Tenet Insurance Company today announced that AM Best, a global credit rating organisation, has upgraded Tenet’s financial strength rating to “A” from “A-“ and issuer credit rating to “a” from “a-“. With this upgrade, Tenet is the one of two general insurance companies in Singapore meriting an “A” rating by AM Best.

According to AM Best, the upgraded ratings are based on the expected support from Tenet’s new parent. Sompo Japan Insurance Inc completed its acquisition of Tenet on June 1, 2010. Potential gains arising from the support include sharing of the group’s in-house facilities.

“The upgraded reading is testimony of the successful symbiosis that Tenet shares with the Sompo Group,” said Tenet Chief Executive Officer Ms Stella Tan.

“Tenet can now leverage on Sompo’s strengths and offer a more comprehensive suite of products. We access Sompo’s in-house expertise in risk engineering services to help our corporate customers manage their loss exposure. With Sompo’s regional network we are now in a better position to help our small- and medium-size customers venture overseas.”

“The tie-up between Sompo and Tenet has given us the ability to grow our premium base,” said Ms Tan. “Industry watchers like AM Best are now sitting up and seeing the strength of the union.”

The new ratings, according to the AM Best report on Tenet, also recognise Tenet’s strong capitalisation level, recovered operating result and strong liquidity of its invested assets.

“Tenet has maintained a superior degree of liquidity, with over 60.0% of its assets invested in cash and fixed income assets,” says the AM Best report. “The company disposed of over half of its equities held during fiscal year 2009, exposing it to lower financial market volatility.”

“Tenet will continue to do well this year,” says Ms Tan. “We expect to end this financial year with growth which is double the industry’s estimated 3 per cent growth, barring any unforeseen circumstances.”

“We have put in effort to grow our channels. Besides agencies, we are moving towards other distribution channels such as financial advisors, travel agents, brokers and direct clients.”

Tenet has also taken bold steps to grow its commercial underwriting business as well as its personal lines products. It will continue to adopt a focused approach on motor insurance, maintaining a stable book through underwriting and pricing consistency in the highly competitive motor line where rates are volatile and margins are often squeezed, says Ms Tan. The company is also keeping a careful watch on its Work Injury Compensation insurance, another volatile class of business due to higher payouts in recent years experienced by the industry, Tenet included.

“We are definitely looking at improving our profitability and growing our market share. With Sompo’s financial backing, better value-added services to our customers, we are aiming to improve our ratings further,” said Ms Tan.

Mr Tadashi Baba, Managing Director of Sompo Japan Asia Holdings Pte Ltd, felt the upgrading in Tenet’s rating is very encouraging.
“We are really pleased that our union is already bearing fruit and industry watchers like AM Best are reflecting the strength of Sompo’s ownership of Tenet positively.”

“With our network and financial backing, we are optimistic for Tenet’s growth into the future. It will be a major player to contend with in Singapore,” he said.