HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Marble Reinsurance Corporation (Marble Re) (Federated States of Micronesia). The outlook for both ratings is stable.
The ratings reflect Marble Re's solid risk-adjusted capitalization and conservative operating strategy. Marble Re's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), remained strong, largely owing to its strong profitability and capital support from the parent company, Marubeni Corporation (Marubeni) (Japan).
Marble Re has reported strong profitability since commencing this captive operation in Micronesia, largely owing to the favorable underwriting results led by its marine cargo line. In fiscal year 2013, Marble Re started expanding the product portfolio into non-marine cargo lines by leveraging the strong relationship with Marubeni's group companies. Most of the premium from the new portfolio will be ceded to third-party reinsurers, enabling Marble Re to secure stable income by earning ceding commissions.
Partially offsetting factors include its parent company's credit risk profile. As a single-parent captive of Marubeni, Marble Re has received a wide range of support in terms of capitalization, management expertise and risk management strategy. As a result, Marble Re's business relies on Marubeni's credit risk profile and competitiveness.
While Marble Re is well-positioned for its current ratings, downward pressure could arise if there is material deterioration in Marble Re's risk-adjusted capitalization due to significant operating losses or an adverse change in its capital management plan, in addition to significant downward movement in Marubeni's credit risk profile.
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.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
• Alternative Risk Transfer (ART)
• Evaluating Country Risk
• Catastrophe Analysis in A.M. Best Ratings
• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers
• Understanding Universal BCAR
• Rating Members of Insurance Groups
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.
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