SINGAPORE--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Ratings to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb+” from “a-” of Asia Capital Reinsurance Group Pte. Ltd. (Asia Capital Re) (Singapore) and its subsidiary, Asia Capital Reinsurance Malaysia Sdn Bhd (ACRM) (Malaysia). AM Best also has downgraded the Long-Term ICR to “bb+” from “bbb-” of the non-operating insurance holding company, ACR Capital Holdings Pte. Ltd. (Singapore). AM Best has placed these Credit Ratings (ratings) under review with negative implications. Concurrently, these ratings have been withdrawn as the company has requested to no longer participate in AM Best’s interactive rating process.
These rating actions follow an announcement on December 5, 2019, that Catalina Holdings (Bermuda) Ltd. (Catalina), a group specializing in global (re)insurance run-off operations, has reached an in principle agreement to acquire 100% ownership of Asia Capital Re, including its wholly owned subsidiary, ACRM. Subject to all necessary regulatory and other approvals being granted, the acquisition is expected to be completed during the first half of 2020.
The rating downgrades of Asia Capital Re follow a revision in AM Best’s assessment of the company’s business profile. Asia Capital Re was viewed previously to have a well-established profile as a regional reinsurer in Asia and in other selected markets. However, as part of the transaction, the company has announced that it will cease writing business with immediate effect and will therefore enter into run-off. Prospectively, Catalina intends to use Asia Capital Re as a hub to build its Asian run-off operations.
The ratings of Asia Capital Re reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating downgrades of ACRM follow the actions taken on Asia Capital Re and reflect the removal of rating enhancement ACRM previously received from Asia Capital Re. The ratings of ACRM reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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