AM Best Comments on Credit Ratings of Milli Reasurans Turk Anonim Sirketi

LONDON--(BUSINESS WIRE)--AM Best has commented that the Financial Strength Rating of C (Weak) and the Long-Term Issuer Credit Rating of “ccc” (Weak) of Milli Reasurans Turk Anonim Sirketi (Milli Re) (Türkiye), both with a negative outlook, remain unchanged following the devastating earthquakes in Türkiye and Northern Syria.

On 6 February 2023, two powerful earthquakes of more than 7.5 magnitude struck several south-eastern Turkish provinces. The earthquakes rank among the worst tremors in the country’s history and resulted in widespread devastation, as well as the loss of thousands of lives in Türkiye and northern Syria. Turkish authorities have widely estimated that economic losses will run into the tens of billions of dollars. Elevated levels of political and economic risk in Türkiye are expected to increase further as a consequence of the catastrophe.

While there is significant uncertainty in respect of the insured loss relating to the earthquakes, AM Best expects Milli Re’s exposure to be covered largely by its comprehensive retrocession programme, backed by counterparties of robust credit quality. As a result, the company’s net exposure should be contained and risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), is not expected to fall below AM Best’s previous expectations.

AM Best will continue to monitor closely events in Türkiye and their impact on Milli Re’s creditworthiness.

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