LONDON--(BUSINESS WIRE)--A.M. Best has assigned a Financial Strength Rating of A (Excellent) and a Long-Term Issuer Credit Rating of “a” to Barents Reinsurance S.A. (Barents Re Lux) (Luxembourg). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings of Barents Re Lux primarily reflect its affiliation with and the support received from Barents Re Reinsurance Company Inc. (Barents Re Panama) (Panama), which owns 51% of the company’s direct parent, BRM Barents SCA (Luxembourg). BRM Barents SCA is controlled by a general partner, which is under the control of Barents Re Panama.
Barents Re Lux receives explicit support from Barents Re Panama under a quota share agreement through which a significant share of Barents Re Lux’s premiums, losses and expenses are ceded to Barents Re Panama.
In addition to the support from Barents Re Panama, the ratings also reflect Barents Re Lux’s strong standalone risk-adjusted capitalisation, which benefits from low net underwriting leverage. The company has a relatively small capital base, but A.M. Best expects Barents Re Lux’s shareholders to inject further capital to support future growth.
Barents Re Panama started writing a portfolio of European facultative reinsurance business in 2011, and this portfolio will be renewed into Barents Re Lux. Going forward, Barents Re Lux will write both non-life and life reinsurance, with non-life facultative business comprising approximately two-thirds of premium income and the remainder consisting of non-life and life treaty business. The company is expected to write a diversified book of energy, property and engineering, bonds, general aviation, financial services and other reinsurance risks with a focus on Europe.
In A.M. Best's opinion, profitable growth in the very competitive European reinsurance market will be challenging for Barents Re Lux, particularly in view of its limited business profile. However, on a net basis, Barents Re Lux’s performance will be protected by its comprehensive reinsurance programme.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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