A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of PMG Assurance Ltd. (PMG) (Bermuda). The outlook for both ratings is negative. The ratings reflect PMG’s excellent capitalization, historically strong operating performance and strategic position as the captive insurance company for the Sony Group, whose ultimate parent is Sony Corporation (Sony) [NYSE: SNE]. PMG’s role is to meet certain global insurance requirements of Sony’s group members. Beginning in 2010, PMG did not renew nor participate in any non-related third-party treaties in any form. PMG continues its operations, but with a strategic change in underwriting directed fully towards Sony-related business as a “pure” captive. The company’s strengths are derived from its underwriting focus, long-standing customer relationships and conservative operating strategy. PMG writes mostly proportional property and marine reinsurance business and ceased writing life business effective January 16, 2011. However, going forward, PMG expects to add a small amount of employee benefits coverage. The company maintains a large exposure to earthquake-related losses in Japan due to its coverage of Sony’s risks. Due to the nature of the relationship between PMG and Sony, the changes in Sony’s credit risk profile have put pressure on PMG’s ratings. PMG’s success is reliant on Sony’s ability to increase its credit risk profile, competitiveness and risk management. The captive continues to be an integral component of Sony’s risk management platform. A.M. Best’s view of third-party credit ratings, as well as market-based credit risk measures of Sony indicates negative rating pressure on PMG. Additionally, negative rating pressure might arise if there is any significant downward movement in Sony’s risk profile. Any upward rating movement is predicated on improvement in Sony’s risk profile coupled with maintenance of PMG’s capital strength. A.M. 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. The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.