AM Best Assigns Credit Ratings to Berliner Re Reinsurance Company Inc.
08 Mayo 2024 - 2:40PM
Business Wire
AM Best has assigned a Financial Strength Rating of A-
(Excellent) and a Long-Term Issuer Credit Rating of “a-”
(Excellent) to Berliner Re Reinsurance Company Inc. (Berliner)
(Barbados). The outlook assigned to these Credit Ratings (ratings)
is stable.
The ratings reflect Berliner’s balance sheet strength, which AM
Best assesses as strongest, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management.
The company is Barbados-domiciled and began commercial
operations in 2022, underwriting surety for renewable energy and
infrastructure developments in Spain seeking further geographic
diversification in Latin American markets.
The ratings of Berliner also reflect its strongest level of
risk-adjusted capitalization, as measured by Best’s Capital
Adequacy Ratio (BCAR), adequate reinsurance program and
conservative investment strategy aimed at providing liquidity and
maintaining appropriate asset-liability management. Partially
offsetting these positive rating factors are Berliner’s business
profile that is bounded by its current concentration in a single
business line and distribution channel, as well as the highly
competitive landscape in its target geographic markets’ surety bond
segment amid a challenging economic environment.
Berliner’s risk-adjusted capitalization stands at the strongest
level underpinned by a robust capital base, and low underwriting
leverage in conjunction with its conservative investment
allocation. In AM Best’s view, the company’s operating performance
is pressured by its high administrative expense structure,
accordingly due to its startup nature; nevertheless, a continuously
expanding top line in conjunction with well-contained claims and
consistent inflow of investment income are expected to enhance
bottom line results within the short term. Berliner constantly
reviews its underwriting guidelines to improve the performance of
its businesses. Additionally, reinsurance commissions stemming from
its quota share agreement with counterparties with a good level of
security, will contribute gradually to offset its high operating
expense structure. Berliner posted a net income of USD 2.3 million
within its first year of operation, reflecting a 2.3%
return-on-equity ratio in 2022.
Negative rating actions could occur if underwriting results fall
short of AM Best’s expectations and deteriorate to levels no longer
supportive of an adequate operating performance assessment.
Positive rating actions, while unlikely within the midterm, could
occur if the company is able to achieve geographic expansion
successfully while maintaining premiums sufficiency.
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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Salvador Smith Senior Financial Analyst +52 55
9085 7506 salvador.smith@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Alfonso Novelo Senior Director, Analytics +52
55 9085 7501 alfonso.novelo@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com