AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of GUNA Re

HONG KONG--(BUSINESS WIRE)--AM Best has removed from under review with negative implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of GUNA Re (Cayman Islands). The outlook assigned to these Credit Ratings (ratings) is stable.

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

The removal of GUNA Re’s under review with negative implications status reflects the resolution of the uncertainty surrounding the company’s balance sheet strength, following a capital injection from its ultimate parent, ITOCHU Corporation (ITOCHU). In May 2026, GUNA Re recorded significant capital erosion arising from accounting treatment issues in the novation of an underwriting portfolio from the existing entity, NEWGT Reinsurance Company, Ltd. (NEWGT) to GUNA Re, which was viewed as NEWGT’s re-domiciled entity established in the Cayman Islands in February 2026. GUNA Re took immediate remedial actions to improve its capital position, including the suspension of new business underwriting, as well as seeking internal approval for capital support to replenish its capital from ITOCHU. On 19 August 2026, the company received a capital injection from ITOCHU, which fully restored its capital to the initial capitalisation level set out in its business plan. AM Best expects GUNA Re’s risk-adjusted capitalisation to remain at the strongest level over the intermediate term, as measured by Best’s Capital Adequacy Ratio (BCAR) based on its business plan, following this capital injection.

AM Best considers GUNA Re to be a re-domiciled entity rather than a start-up company, reflecting the continuity of NEWGT’s management team and its established operating track record. Management remains focused on the growth of third-party business in line with the business plan, with an intention to carefully control the pace of business expansion alongside appropriate capital management. AM Best will continue to monitor GUNA Re’s risk-adjusted capitalisation and operating performance closely during this business expansion phase.

Negative rating actions could occur if GUNA Re’s aggressive expansion into third-party business leads to a deterioration in its business profile, driven by stronger competition and reduced underwriting control inherent to a traditional single-parent captive business model. Negative rating actions also could arise if there is a material decline in its risk-adjusted capitalisation from heightened underwriting risk due to an aggressive business expansion or an excessive dividend payout to ITOCHU. Although unlikely in the near term, positive rating actions could occur if GUNA Re demonstrates sustainable improvement in its underwriting and operating profitability for a period of time, while maintaining a robust level of risk-adjusted capitalisation.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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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