OLDWICK, N.J.–(BUSINESS WIRE)–AM Greatest has affirmed the Monetary Energy Ranking of A (Glorious) and the Lengthy-Time period Issuer Credit score Ranking of a (Glorious) of Brit Reinsurance (Bermuda) Restricted (Brit Re) (Bermuda). The outlook of those Credit score Scores (rankings) is steady.
The rankings mirror Brit Re’s stability sheet power, which AM Greatest assesses as very robust, in addition to its sufficient working efficiency, restricted enterprise profile and applicable enterprise threat administration (ERM). The rankings additionally profit from the implicit and express help of its intermediate father or mother, Brit Restricted (Brit), and its final father or mother, Fairfax Monetary Holdings (OTC:) Restricted (Fairfax) [TSX: FFH].
Brit Re, which is domiciled in Bermuda, acts primarily as an inside reinsurer for its associates, Lloyd’s Syndicate 2987 and Brit UW Restricted. In 2024, Brit Re put in place a brand new development technique specializing in third-party enterprise exterior of Brit Group, to broaden its property/casualty and specialty (re)insurance coverage traces. The corporate continues to derive most of its premium from a quota share contract with Syndicate 2987.
Brit Re’s very robust stability sheet power is supported by traditionally worthwhile underwriting outcomes and manageable premium development. Liquidity measures are sound and supported by short-term, liquid holdings which can be predominantly high-quality mounted revenue securities and money.
Whereas the corporate’s risk-adjusted capitalization is maintained persistently on the strongest degree, as measured by Greatest’s Capital Adequacy Ratio (BCAR), the general stability sheet evaluation of very robust additionally considers Brit Re’s materials disaster publicity stemming from its Syndicate 2987 enterprise and the restricted fungibility of a few of its invested property, which help Lloyd’s operations. A good portion of Brit Re’s property is pledged as collateral for a stop-loss contract written to offer Funds at Lloyd’s (FAL) for Brit. The very robust stability sheet evaluation additionally displays that capital development is constrained by sizable dividend funds made by Brit Re to its intermediate father or mother inside the Fairfax group. AM Greatest sees the mixture of great development in Brit Re’s third-party enterprise, if coupled with continued vital annual dividend payouts, as having the potential to cut back Brit Re’s risk-adjusted capitalization, as measured by BCAR. Nonetheless, AM Greatest expects Brit Re’s risk-adjusted capitalization to stay supportive of the general very robust stability sheet power evaluation.
AM Greatest assesses Brit Re’s working efficiency as sufficient, largely primarily based on the efficiency of its all-lines quota share on enterprise written by Syndicate 2987, of which Brit Re assumes a 20% share of web premiums written. The variability of the outcomes of the syndicate enterprise has been offset by the profitability of the FAL stop-loss contract. Underwriting efficiency additionally advantages from Brit Re’s very low expense construction, which advantages from economies of scale of Brit, its father or mother firm. Complete (EPA:) funding returns have been variable over the previous 5 years, with unrealized good points and losses impacted by the corporate’s longer-term, value-oriented fairness portfolio and alter in rate of interest surroundings. In 2023, underwriting outcomes had been favorably helped by premium charge will increase, the shortage of shock losses and decrease attritional losses from the entire account quota share with Syndicate 2987, and good points from its mounted funding portfolio. Within the first 9 months of 2024, Brit Re’s underwriting and funding outcomes remained worthwhile.
AM Greatest assesses Brit Re’s enterprise profile as restricted given the corporate’s concentrated enterprise manufacturing, and the corporate’s ERM practices as applicable because of the governance construction in place.
The corporate advantages from being a part of Fairfax, which maintains favorable monetary flexibility, a powerful liquidity place and a monitor document of supporting its (re)insurance coverage subsidiaries. Due to this fact, Fairfax supplies ranking enhancement to Brit Re primarily based on the implicit and express help Brit Re receives from its intermediate father or mother, within the type of capital help, enterprise distribution channels and general operational integration.
This press launch pertains to Credit score Scores which were printed on AM Greatest’s web site. For all ranking info referring to the discharge and pertinent disclosures, together with particulars of the workplace chargeable for issuing every of the person rankings referenced on this launch, please see AM Greatest’s Latest Ranking Exercise internet web page. For extra info concerning the use and limitations of Credit score Ranking opinions, please view Information to Greatest’s Credit score Scores. For info on the correct use of Greatest’s Credit score Scores, Greatest’s Efficiency Assessments, Greatest’s Preliminary Credit score Assessments and AM Greatest press releases, please view Information to Correct Use of Greatest’s Scores & Assessments.
AM Greatest is a world credit standing company, information writer and information analytics supplier specializing within the insurance coverage business. Headquartered in the US, the corporate does enterprise in over 100 nations with regional places of work in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico Metropolis. For extra info, go to www.ambest.com.
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Guilherme Monteiro Simoes, CFA
Senior Monetary Analyst
+1 908 882 2317
man.simoes@ambest.com
Christopher Sharkey
Affiliate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Gregory Dickerson
Director
+1 908 882 1737
gregory.dickerson@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Supply: AM Greatest
