OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a+” of MS Frontier Reinsurance Limited (MS Frontier) (Hamilton, Bermuda). The outlook for both ratings is stable. MS Frontier is a wholly owned subsidiary of Mitsui Sumitomo Insurance Company, Limited (MSI), which is a subsidiary of MS&AD Insurance Group Holdings, Inc. (MS&AD) (both domiciled in Japan).
The ratings reflect MS Frontier’s overall positive operating performance over the past five years taking into account the severe global catastrophe events of 2011. In addition, MS Frontier’s ratings are enhanced by the global presence, financial support and balance sheet strength of its parent, MS&AD. MS Frontier maintains an excellent level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). MS Frontier continues to be a strategic insurance vehicle that was designed to be a part of MSI’s geographic portfolio, risk diversification and overseas business expansion strategy.
Offsetting risk factors include MS Frontier’s exposure to low frequency, high severity events, which could significantly reduce its capital given its focus on property catastrophe reinsurance. MS Frontier’s management will be challenged with controlling its growth in the newly established branch, implementing new “non-catastrophe” underwriting guidelines, as well as continuing to manage exposure to high severity, low frequency events worldwide.
Positive rating actions may result if MS Frontier maintains superior financial performance with lower volatility, continued product diversification and strong risk-adjusted surplus levels.
Negative rating actions may result if MS Frontier’s capital deteriorates, if the company experiences severe catastrophe events or there is a decreasing level of support from MSI.
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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