A.M. Best has affirmed the financial strength rating of “A-” (Excellent) and the issuer credit rating of “a-” of Marble Reinsurance Corporation, with a stable outlook for both ratings.
The ratings reflect what A.M. Best has called Marble Re's solid risk-adjusted capitalisation and conservative operating strategy.
Marble Re has reported strong profitability since commencing this captive operation in Micronesia, largely owing to the favourable underwriting results led by its marine cargo line.
In FY 2013, Marble Re started expanding its product portfolio into non-marine cargo lines thanks to its strong relationship with Marubeni's group companies.
Most of the premium from the new portfolio will be ceded to third-party reinsurers, enabling Marble Re to secure stable income by earning ceding commissions.
Partially offsetting factors include its parent company's credit risk profile.
Due to its position as a single-parent captive of Marubeni, Marble Re has received a wide range of support in terms of capitalisation, management expertise and risk management strategy.
As a result, Marble Re's business relies on Marubeni's credit risk profile and competitiveness.
While Marble Re has been deemed well-positioned for its current ratings by A.M. Best, downward pressure could arise if there is “material deterioration” in Marble Re's risk-adjusted capitalisation due to significant operating losses or an adverse change in its capital management plan, in addition to significant downward movement in Marubeni's credit risk profile.
