OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” for Optimum Re Insurance Company (Dallas, TX) and Optimum Reassurance Inc. (Montreal, QC) (collectively referred to as Optimum Re).
The ratings reflect Optimum Re’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings reflect the very strong assessment of the combined entities’ risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio and a high quality asset portfolio. The positive rating outlooks of Optimum Re’s ratings are based on the group's continued and consistent favorable operating profitability and assumed premium growth. The company underwrites essentially low-risk mortality business through traditional life insurance products, as well as disability, travel and final expense insurance coverages. The ratings also reflect Optimum Re’s ability to maintain a leadership role in the niche markets it serves as a well-regarded North American life reinsurer. The company has developed certain niches while serving small to larger life insurers in the individual and group segments in Canada and the United States. The company’s risks are well-identified and risk management is secured through various inputs within the company, with a focus on conservatism. Both companies use retrocession as part of their risk management strategy.
Factors that could lead to a rating upgrade are continued and consistent favorable operating profitability and assumed premium growth. Factors that could lead to a downward outlook revision or a rating downgrade include unfavorable operating results or significant decline in risk-adjusted capital to a level that no longer supports the current ratings.
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