A.M. Best has assigned a financial strength rating of "A- (Excellent)" and issuer credit rating of “a-” to NEWGT Reinsurance Company in Bermuda.
The ratings reflect the Class 3 general business reinsurer’s stable operating profitability, aided by its retrocession coverage in its general account and the implicit support from the parent company, Itochu Corporation.
NEWGT reported favourable operating performance in its general account over the past five years, mainly driven by its major line of marine cargo product, which is diversified globally. NEWGT’s retrocession coverage against its major product line helped it to stabilise its underwriting results during the past years.
As a single parent captive, NEWGT receives support from Itochu to grow in the captive market in the form of capital injections, as well as support from its integrated risk management system.
Partially offsetting these positive rating factors include NEWGT’s continuous expansion into the third party business; NEWGT will participate in Lloyd’s Syndicates in 2013, which accounts for a significant proportion of its consolidated net premium income in the forecast periods.
Although Itochu will support this new business by injecting capital, the increase in the third-party business could increase volatility in NEWGT’s operating performance.
NEWGT reported a sharp increase in its loss ratio in the segregated account in fiscal year 2010 as it has experienced several large claims from the catastrophe business that has been in run off since 2012.
The uncertain economy outlook could impact NEWGT’s operating performance, as the sales of marine cargo are susceptible to trading activities.
