A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a” of Evergreen Reinsurance Company, Ltd. (ERCL) (Bermuda). The outlook for both ratings is stable.
The ratings reflect ERCL’s strong risk-adjusted capitalization, track record of favorable operating performance and prudent risk management. The ratings also recognize ERCL’s role as the pure captive of Evergreen Group, a Taiwan-based international logistics and transportation conglomerate.
ERCL’s proven quality book of in-house business, in conjunction with the release of prior year reserves, contributed to favorable underwriting results over the past few years.
Offsetting rating factors include the potential capital demand from Evergreen Group’s subsidiaries and its significant gross exposure to marine and aviation claims. The rating acknowledges that these risks are protected by reinsurance.
While positive rating actions for ERCL are unlikely in the near term, negative rating actions could occur in the event of a continued adverse operating performance and/or a significant decline in its risk-adjusted capitalization.
