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AM Best affirms ratings of Bermuda’s Sura Re Ltd – The Royal Gazette

Source link : https://theamericannews.net/america/bermuda/am-best-affirms-ratings-of-bermudas-sura-re-ltd-the-royal-gazette/

Updated: Sep 24, 2024 09:30 PM

AM Best has affirmed the ratings of Sura Re Ltd (File photograph)

AM Best has affirmed the financial strength rating of B++ (Good) and the long-term issuer credit rating of “bbb” (Good) of Bermudian-based Sura Re Ltd.

The outlook of these credit ratings is stable.

The ratings reflect Sura 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.

Sura Re is a captive reinsurer of Suramericana SA, a Colombia-based insurance group that is 81.1 per cent owned by Grupo de Inversiones Suramericana SA.

The company was established in Bermuda as a Class 3A insurer in December 2015, and in April 2022, received approval from the regulator to operate as a Class C insurer.

Sura Re’s main purpose is to participate in property business underwritten by Sura’s affiliates across Latin America (ie, Chile, Colombia, México, Panama and the Dominican Republic) to help the group achieve its strategic regional goals. AM Best said it recognises the greater relevance that Sura Re is aiming to achieve in Sura’s overall regional strategy, which is starting to be reflected with Sura’s expanded geographic scope.

AM Best said it assesses Sura Re’s balance sheet strength as very strong, given its strongest risk-adjusted capitalisation as measured by Best’s capital adequacy ratio, which is more than adequate for the risks it holds.

The ratings agency said: “During 2023, capital requirements continued to reflect higher premium risk as the company executed its strategy and retained a higher portion of risks. Going forward, AM Best expects Sura Re’s capital requirements to increase due to a larger deployment of its capital, while supporting its current strongest level of risk-adjusted capitalisation.

“The company’s asset-liability management follows a very conservative investment policy focused on maintaining liquidity to cover Sura Re’s obligations in terms of tenure and currencies. Additionally, given the complete support provided by Sura’s expertise and management team, AM Best considers Sura Re’s ERM practices as appropriate.”

In December 2023, AM Best said, Sura Re reported positive net profit for the fifth consecutive year, since its inception. Operative performance was driven by technical results, as Sura Re’s good underwriting practices and continuous fee income persists.

AM Best said it remains attentive to macroeconomic conditions and its impact on the company’s investment results. The captive nature of the company within one of the largest insurance groups in Latin America provides flexibility in terms of growth and premium risk to efficiently manage its capital and return positions in the future. Therefore, AM Best considers operating performance to be adequate for the current ratings.

The ratings agency said negative rating actions could take place if Sura Re fails to meet its financial performance objectives, with results that fall to a level that impacts capital; and therefore, its risk-adjusted capitalisation, either by business decisions, importance to its financial group or deteriorating macroeconomic conditions.

AM Best said no positive rating actions are foreseen in the short term; however, they could occur if Sura Re is able to constantly strengthen its risk-adjusted capitalisation while following prudent risk takings.

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Publish date : 2024-09-24 08:15:00

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Author : theamericannews

Publish date : 2024-09-29 01:53:16

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