A.M. Best has affirmed the financial strength rating of “A- (Excellent)" and the issuer credit rating of “a-” of NEWGT Reinsurance Company (Bermuda). The outlook for both ratings is stable.
According to the agency, the ratings reflect NEWGT’s “robust” risk-adjusted capitalisation and its profitable operating performance. Also, A.M. Best has recognised the support from its Japanese parent company, ITOCHU Corporation.
NEWGT is a single-parent captive of ITOCHU, a major trading company in Japan that engages in a wide range of global businesses.
The captive’s risk-adjusted capitalisation remains robust due to the profitable underwriting results from its major line of ITOCHU-related marine and cargo line and its conservative investment portfolio.
NEWGT has reported profitable operating performance over the past five years, mainly driven by marine cargo business, which is diversified globally due to ITOCHU’s broad range of trading activities.
Additionally, the ratings recognise NEWGT’s strategic importance to ITOCHU, which has provided a wide range of support to NEWGT’s operation and capitalisation.
A.M. Best stated: “Partially offsetting these positive rating factors is NEWGT’s expansion into third party business, which could lead to volatility in operating results. This expansion includes the Lloyd’s market, which accounts for a significant proportion of its total net premium income in the forecasted periods.”
While no positive movement in the ratings is considered in the short term, negative rating action could occur if there is a sharp decline in NEWGT’s risk-adjusted capitalisation caused by deterioration in its operating performance.
According to the agency, material deterioration in ITOCHU’s credit profile could also negatively impact NEWGT’s ratings in the future.
