LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Builders Reinsurance S.A. (Builders Re) (Luxembourg) and Builders Direct S.A. (Builders Direct) (Luxembourg), both subsidiaries of HOCHTIEF Aktiengesellschaft (HOCHTIEF), a large Germany-based construction company that is majority owned by Actividades de Construcción y Servicios S.A. The outlook of these Credit Ratings (ratings) remains stable.
The rating affirmations reflect Builders Re’s excellent risk-adjusted capitalisation, strong operating performance and its importance to the HOCHTIEF group as a risk management tool, providing predominantly group-related casualty and credit reinsurance cover.
A.M. Best expects Builders Re’s risk-adjusted capitalisation to remain excellent, supported by good internal capital generation. Having recorded a moderate net profit of USD 16.9 million in 2015 mainly due to investment losses, in 2016 Builders Re reported a strong profit of USD 37.3 million, supported by a combined ratio of approximately 78% and a positive investment return.
Builders Re’s niche business profile as HOCHTIEF’s special purpose reinsurance vehicle is focused on providing cover for risks mainly emanating from the group’s construction operations in North America.
Builders Direct’s ratings primarily reflect its strategic importance to Builders Re as a source of business growth and diversification, as well as explicit support from Builders Re in the form of reinsurance protection.
Builders Direct was created in 2013 and provides insurance cover to the HOCHTIEF group, as well as to third-party entities with a focus on mutual companies.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated 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.
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