AM Best has affirmed the financial strength rating of ‘A-’ (Excellent) and the long-term issuer credit rating of ‘a-’ (Excellent) of Stonefort Reinsurance, a Luxembourg-based subsidiary of HOCHTIEF Aktiengesellschaft.
The outlook of these credit ratings is ‘stable’.
The ratings reflect Stonefort Reinsurance’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile, and appropriate enterprise risk management.
Stonefort Reinsurance’s retrocession programme was discontinued during the last renewal, which exposes the company’s balance sheet to higher levels of volatility going forward. However, AM Best expects the company’s risk-adjusted capitalisation to remain at its strongest level, supported by low underwriting leverage.
The company’s significant investment allocation to bonds issued by its intermediate parent company remains an offsetting factor.
Stonefort Reinsurance has a track record of strong and stable operating performance, largely driven by robust underwriting results, as demonstrated by a five-year weighted average combined ratio of 79.4 per cent, as calculated by AM Best.
The company's limited business profile assessment reflects its geographically concentrated portfolio of casualty risks, which originates from HOCHTIEF's construction operations in North America.
