LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Humboldt Re Limited (Humboldt Re) (Guernsey). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Humboldt Re’s balance sheet strength, which is categorised as strongest by AM Best, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM) framework.
Humboldt Re’s balance sheet strength is underpinned by its risk-adjusted capitalization being at the strongest level, a flexible retrocession programme, which minimizes counterparty credit risk, and a relatively conservative investment profile. AM Best expects prospective balance sheet strength to remain at the strongest level as Humboldt Re expands its portfolio.
Humboldt Re is a privately owned entity based in Guernsey that provides mainly short-tail property and specialty lines reinsurance. Since it started operating at the end of 2015, the company has derived all of its business solely using the origination capabilities of Credit Suisse’s Insurance-Linked Strategies team, a leading insurance-linked securities hedge fund, which has approximately USD 9 billion of assets under management.
During 2018, the company is projected to underwrite a globally diversified insurance portfolio producing more than USD 240 million of gross written premiums, with a heavy bias toward catastrophe-exposed business lines. The company is anticipated to report a technical and operating loss for the year, driven by catastrophe losses in North America and Japan during the second half of the year. As a result, AM Best expects Humboldt Re’s combined ratio for 2018 to be in excess of 105%.
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