AM Best has affirmed the financial strength rating of B+ [Good] and the long-term issuer credit rating of “bbb-” [Good] of Orion Reinsurance [Bermuda] Ltd. The outlook of these credit ratings is stable. The ratings reflect Orion Reinsurance’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. These ratings reflect Orion Reinsurance’s strongest risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), and the expertise of its management team. The small size of the company partially offsets these positive rating factors, according to AM Best, which limits business diversification given the inherent concentration risk. Orion Reinsurance is licensed by the Bermuda Monetary Authority to act as a class III insurer without restrictions of any kind in its class. The firm’s main line of business is difference in conditions insurance, but the company also retains specific life and non-life insurance business. The company has recognition in the public services industry, as well as strategic alliances to support Latin American reinsurers. As of December 2021, Colombia represented 6 per cent of the company’s gross written premium, with Peru and Mexico generating 14 per cent and 8 per cent, respectively, with the rest distributed in 12 other countries, primarily throughout Latin America and the Caribbean. The company has maintained marginally profitable bottom-line results during most years, which are expected to improve as the company’s business expansion plan takes place, adds AM Best. The results are supported by income from the Rent-a-Captive business, which has presented a consistent flow over the past years. Orion Reinsurance’s risk-adjusted capitalisation has shown improvement since 2019, mainly as a result of a more conservative approach in the investment policies, which reduced asset risk. However, due to the company’s size and operation, the scores are sensitive to changes in its balance sheet structure and the composition of Orion Re’s business portfolio.
