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AM Best Affirms Credit Ratings of Reaseguradora América SPC Ltd.

via Business Wire

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Reaseguradora América SPC Ltd. (RAM Re) (Cayman Islands). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect RAM Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

RAM Re is a subsidiary of ASSA Compañía Tenedora, S.A. and owned ultimately by Grupo ASSA, S.A., a financial services holding company publicly traded on the Panama Stock Exchange.

RAM Re is registered as a segregated portfolio company, licensed as a Class B(iii) insurer under the Cayman Islands’ insurance law, which allows large clients to place proprietary risks through underlying segregated portfolios. AM Best recognizes RAM Re’s strategic role in its group’s overall regional strategy; however, RAM Re’s business profile is considered limited given that the nature of its operation limits the accessibility to other markets when compared with other commercial reinsurers.

The ratings also reflect RAM Re’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and its balance sheet strength assessment at the very strong level. The company also shows sound operating performance and its affiliation to Grupo ASSA, S.A. provides synergies and operating efficiencies, as well as parental support and an appropriate ERM framework. AM Best expects RAM Re to maintain risk-adjusted capitalization levels supportive of its ratings amid changes in its business profile, driven by developments in its segregated portfolios.

Concerns regarding business volume growth and new portfolios integration, which historically have pressured the company´s capital base, continue to be offset through the successful implementation of RAM Re’s strategy. This is reflected in consistent profitability and underpinned by three segregated portfolios that allow some of the group’s largest clients to participate in their own risks.

Factors that could lead to positive rating actions include sustained improvement in RAM Re’s capital base, while maintaining current levels of risk-adjusted capitalization supported by the successful materialization of developments concerning RAM Re’s business profile, including its strategy driven by the integration of segregated portfolios. Factors that could lead to negative rating actions include a deterioration in risk-adjusted capitalization levels, driven by an unsuccessful materialization of developments concerning RAM Re’s business profile, including the failed adoption of its strategy attempting the integration of new segregated portfolios, along with diminished parent commitment.

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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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