A.M. Best has affirmed the financial strength rating of “A- (Excellent)” and the long-term issuer credit ratings of “a-” of Greenlight Reinsurance and Greenlight Reinsurance Ireland, Designated Activity Company.
The rating agency has also affirmed the long-term issuer credit of “bbb-” of Greenlight Capital Re, the ultimate holding company.
The ratings for Greenlight Reinsurance Ireland, Designated Activity Company consider the support from Greenlight Re and its ultimate parent, Greenlight Capital Re.
Greenlight Reinsurance is a broker market reinsurer writing a combination of property, casualty and specialty reinsurance business.
The ratings of Greenlight Re are based on its strong risk-adjusted capitalisation, experienced management team and strong enterprise risk management practices, as well as the overall implementation of the business strategy.
According to A.M. Best, the positive rating factors are partially offset by the greater investment risk associated with its alternative investment strategy and the challenges Greenlight Re faces writing profitable business in current market conditions.
A.M. Best suggested that while Greenlight Re’s underwriting results have been below expectations in recent years, it recognises the remediation actions taken by the company’s management.
It also noted that Greenlight Capital has been able to withstand and stay within the risk tolerances of recent stress scenarios, such as Hurricanes Harvey, Irma and Maria.
The agency said: “The outlook of the captives could be raised if operating performance improves and risk-adjusted capital remains supportive of the ratings. Negative rating pressure could occur if underwriting performance declines and demonstrates volatility that negatively impacts earnings and capitalisation over time.”
It added: “Negative rating pressure could also result if there is a material shift in risk profile that could potentially undermine the stability and profitability of the company.”