A.M. Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a+” of GreenStars BNP Paribas (Luxembourg), an ancillary of BNP Paribas (Luxembourg).
The ratings reflect GreenStars’ balance sheet strength, which A.M. Best described as very strong, as well as its strong operating performance, neutral business profile and suitable enterprise risk management.
GreenStars’ balance sheet strength is carried by risk-adjusted capitalisation at the strongest level, as measured by Best’s capital adequacy ratio (BCAR).
GreenStars’ risk-adjusted capitalisation to remain at the strongest level, supported by good internal capital generation and low net underwriting leverage as expected by A.M. Best.
An offsetting rating factor remains the company’s high dependence on reinsurance, however, this is mitigated partially by GreenStars’ diversified and well-rated reinsurance panel.
GreenStars’ strong operating performance is demonstrated by its five-year average return on capital and surplus of 16.3 percent.
Performance is largely driven by the company’s low loss experience, which helps it to obtain high inwards ceding and profit commissions.
The company partly decreases the potential collection of losses by purchasing extensive reinsurance.
GreenStars provides support for BNP Paribas’ lending operations, as a credit-risk management tool.