AM Best Affirms Credit Ratings of Jacana Re Limited

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Jacana Re Limited (Jacana Re) (Guernsey). Jacana Re is a subsidiary of BHL Holdings Limited (BHL), a non-operating holding company of the BHL group. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Jacana Re’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile, and appropriate enterprise risk management. In addition, the ratings consider, in the form of lift, Jacana Re’s strategic importance to its parent company, BHL, as the group’s internal reinsurer.

Jacana Re’s balance sheet strength is underpinned by its strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the balance sheet strength assessment reflects the company’s conservative investment portfolio, which supports an excellent liquidity position, and the absence of retrocession dependence, as all the risks are retained fully. The assessment also incorporates the potential for moderate volatility in Jacana Re’s risk-adjusted capitalisation given the company’s relatively small capital base and its growing exposure to catastrophe risk, as the company has moderately increased its participation on catastrophe excess of loss programmes in the fiscal year ending 2022.

The company has a track record of strong operating performance, evidenced by a five-year (fiscal-years 2017-2021) weighted average combined ratio and weighted average return-on-equity ratio of 86.9% and 19.5%, respectively. Jacana Re’s performance benefits from a strong focus on underwriting discipline across the underlying books of business that the company reinsures. Investment income makes a small, albeit positive, contribution to overall earnings.

Jacana Re was established in Bermuda in March 2004 as an internal reinsurer of the BHL group and re-domiciled to Guernsey in 2013. The majority of the risks underwritten by Jacana Re stem from South Africa, with a smaller portion derived from Australia. The entity is used by BHL as a risk management tool, retaining 100% of risks ceded from insurance companies of the BHL group and related entities in Australia. Given its role in the group, Jacana Re’s business profile assessment is constrained somewhat by the operations and strategic decisions of the BHL group in terms of geographic diversification, premium volume, and lines of business underwritten.

This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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