A.M. Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” of Ocean International Reinsurance Company (Ocean Re), domiciled in Barbados.
The outlook of these credit ratings (ratings) remains stable.
A.M. Best categorises Ocean Re’s balance sheet strength as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The stable outlook and rating affirmations reflect the consistently positive bottom-line results the company has been able to generate through its underwriting while still protecting its capital base. Partially offsetting these positive rating factors is the susceptibility of its captive business to regulatory changes.
Ocean Re focuses on reinsurance and offers a diversified product mix throughout Latin America and other strategically identified geographic markets. It also offers facultative programmes that are fully funded to the projected ultimate losses of the company’s clients.
According to A.M. Best, Ocean Re’s business development strategy increases the proportion of traditional reinsurance in its portfolio, as compared with its captive portfolio; however, regulatory changes remain a factor when evaluating the continuity of its fully funded programmes, as legislative adjustments could potentially limit its premium growth.
It added that the company’s risk-adjusted capitalisation remains strong and has benefited from its adequate operating performance, which, along with conservative dividend policy, continues to strengthen A.M. Best’s future view of the company’s development of capitalisation and overall financial strength.
A.M. Best said: “Ocean Re’s operating performance this year has resulted in consistent positive net income, due to good levels of premium sufficiency derived from the nature of its captive business, as well as from an adequate retrocession programme for its expanding traditional reinsurance lines. Underwriting performance continues to drive the company’s strategy, either through a larger risk-taking or through improved underwriting standards for new captive business.”