AM Best revises the outlooks to positive from stable and affirms the Financial Strength Rating of ‘B++’ (Good) and the Long-Term Issuer Credit Rating of ‘bbb+’ (Good) of Sapphire Reinsurance Company (Sapphire). Based in the Cayman Islands, Sapphire is a captive reinsurer related to a large privately owned conglomerate with operations across multiple business sectors in Latin America, including industrial, motor, textile, pipe manufacturing, public transport and waste management. The outlooks revised to positive reflect Sapphire’s positive operating performance driven by ongoing underwriting discipline and operational efficiency. AM Best expects this favourable trend in operating performance to continue while the company maintains its current assessment of balance sheet strength. Sapphire’s balance sheet strength is assessed as strongest, supported by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment also factors in a constantly growing capital base supported by the reinvesting of earnings and a strong liquidity position. The company continues to strengthen its operating performance, maintaining positive results driven by sound technical efficiency. Over the last five years, the combined ratio has consistently remained below 100 per cent, averaging 44.5 per cent. While investment activity supports profit growth, Sapphire’s profitability is primarily driven by its solid operational performance. However, AM Best assesses Sapphire’s business profile as limited due to its concentration levels and limited commercial scope as a captive. At end-year 2024, the portfolio is highly concentrated with 86.2 per cent of gross premiums written in Colombia, followed by 12.9 per cent in Chile and 0.9 per cent in El Salvador. Within the business mix, motorcycle insurance represents the bulk of the portfolio at 59.5 per cent of net written premiums. AM Best considers Sapphire’s enterprise risk management to be appropriate as it has defined policies and procedures adopted through a conservative approach that is continuously monitored.
