A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of NEWGT Reinsurance Company, Bermuda. The outlook for both ratings is stable.
The ratings reflect NEWGT’s adequate risk-adjusted capitalisation, stable operating profitability, aided by its retrocession coverage, and the support from its parent company, Itochu Corporation.
NEWGT is a single-parent captive of Itochu and Class 3 general business reinsurer, and is registered under the Segregated Accounts Company Act 2000 in Bermuda. The parent is one of the major trading companies in Japan engaging in a wide range of global businesses.
NEWGT reported favourable operating performance over the past five years, mainly driven by its major line of marine cargo business, which is diversified globally due to the broad range of trading activities conducted by Itochu.
Performance has been aided by the company’s strong retrocessional coverage with a diversified panel of global reinsurers. Additionally, the ratings recognise NEWGT’s strategic importance to Itochu, which has demonstrated its commitment through capital support as appropriate.
Partially offsetting these positive rating factors is NEWGT’s expansion into third party business, which brings more potential volatility to the operating result.
While there is no positive movement in the ratings considered in the short term, negative rating actions could occur if there is a sharp decline in NEWGT’s risk-adjusted capitalisation caused by a deterioration in its operating performance.
