Fitch Ratings has assigned a long-term insurer financial strength rating of 'A-' to Eureka Re, a Barbados-based reinsurer established by the Rainmaker Group. The rating outlook is ‘Stable’.
The result reflects Eureka Re's stable financial performance driven by strategic focus, extremely strong capitalisation, low investment risk from USD Treasury Bonds, low earnings volatility, and high but well-managed retrocession dependence through a stable reinsurance policy and adequate reinsurers.
The company focuses on two main segments: a risk-bearing model, underwritten through MGAs like XSGlobal and treaty reinsurance, and a fee-based model that services captive insurance companies, fully ceding risks to retrocessionaires.
Eureka Re's company profile is rated 'bbb-' due to moderate diversification and weaker competitive positioning and business risk profile compared to global peers.
Furthermore, the firm's investment and liquidity risk is very strong, with high-quality, fixed-maturity investments, manageable risky assets, and favorable liquidity.
The liquid assets to technical reserve ratio falls in the 'bbb+' score category, but Fitch assesses it at 'a-' due to the company's policy of strengthening incurred but not reported reserves per best practices.
