A.M. Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” of Reaseguradora America SPC (RAM Re), which is based in the Cayman Islands.
The outlook of these credit ratings is stable.
RAM Re is a subsidiary of ASSA Compañía Tenedora S.A. and owned ultimately by Grupo ASSA, S.A., a financial services holding company publicly traded on the Panama Stock Exchange.
RAM Re is registered as a segregated portfolio company, licensed as a Class B(iii) insurer under the Cayman Islands’ insurance law, which allows large clients to place proprietary risks through underlying cells.
A.M. Best stated that the ratings reflect RAM Re’s balance sheet strength, which was categorised as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The rating firm also reflects RAM Re’s “continued strong risk-adjusted capitalisation”, as measured by Best’s Capital Adequacy Ratio (BCAR), “sound operating performance”, and its affiliation to Grupo ASSA, S.A., which provides synergies and operating efficiencies, as well as “parental support and an appropriate ERM framework”.
A.M. Best suggested that they expect RAM Re to maintain risk-adjusted capitalisation levels supportive of its current ratings amid material changes in its business profile, driven by ongoing developments in its segregated portfolio cells.
However, concerns regarding business volume growth and new portfolio integration, which pressure the company's capital base, are expected to be offset in the immediate term through the successful implementation of RAM Re’s strategy.
A.M. Best outlined factors that could lead to positive rating actions include sustained improvements in risk-adjusted capitalisation initially supported on the successful materialisation of developments concerning RAM Re’s business profile, including its strategy driven by the integration of a new segregated portfolio cell.
“Factors that could lead to negative rating actions include a deterioration in risk-adjusted capitalisation levels driven by an unsuccessful materialisation of developments concerning RAM Re’s business profile, including the failed adoption of its strategy attempting the integration of a new segregated portfolio cell,” A.M. Best added.