AM Best Affirms Credit Ratings of Ocean International Reinsurance Company Limited

MEXICO CITY--()--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Ocean International Reinsurance Company Limited (Ocean Re) (Barbados). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect Ocean Re’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The stable outlook and rating affirmations reflect the consistently positive bottom line results the company has been able to generate through its underwriting while still protecting its capital base. Partially offsetting these positive rating factors is the susceptibility of its captive business to regulatory changes.

Ocean Re is a Barbados-based reinsurer, licensed as a qualifying insurance company, which is focused on reinsurance and offers a diversified product mix throughout Latin America and other strategically identified geographic markets. The company also offers facultative programs that are fully funded to the projected ultimate losses of the company’s clients. Its business development strategy clearly identifies an increase in the proportion of traditional reinsurance in its portfolio, as compared with its captive portfolio; however, regulatory changes remain a factor when evaluating the continuity of its fully funded programs, as legislative adjustments could potentially limit its premium growth.

Ocean Re’s regional geographic footprint continues to expand, reaching into 24 countries throughout Latin America and eight countries outside this region. Ocean Re foresees significant growth potential in Panama, Colombia and Mexico, as well as Guatemala, Ecuador, Paraguay and Peru, which offer potential to diversify the portfolio.

The company’s risk-adjusted capitalization remains strong, and has benefited from its adequate operating performance, which, along with a conservative dividend policy, continues to strengthen AM Best’s future view of the company’s development of capitalization and overall financial strength.

Ocean Re’s operating performance in 2019 has resulted in consistent positive net income, due to good levels of premium sufficiency derived from the nature of its captive business, as well as from an adequate retrocession program for its expanding traditional reinsurance lines. Underwriting performance continues to drive the company’s strategy, either through a larger risk taking or through improved underwriting standards for new captive business.

Positive rating actions may take place if the company is able to maintain a healthy traditional reinsurance portfolio and further diversify its revenue sources while sustaining a sound retrocession program and current risk-adjusted capitalization metrics. Negative rating actions could take place if there are significant business disruptions in its captive business or if traditional reinsurance underwriting shows poor operating performance to levels that affect the capital position of the company.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM 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) (Version Oct. 13, 2017)
  • Evaluating Country Risk (Version Oct. 13, 2017)
  • Understanding Universal BCAR (Version May 23, 2019)
  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)
  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Understanding Best’s Credit Ratings.

  • Previous Rating Date: September 7, 2018.
  • Date Range of Financial Data Used: 30 November 2012-August 31, 2018

This press release relates to rating(s) that have been published on AM Best's website. For additional 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 see AM Best’s Recent Rating Activity web page.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Elí Sánchez
Associate Director
+52 55 1102 2720, ext. 122
eli.sanchez@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

Contacts

Elí Sánchez
Associate Director
+52 55 1102 2720, ext. 122
eli.sanchez@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com