Press Release - MARCH 08, 2019

AM Best Assigns Credit Ratings to Reunion Re Compañia de Reaseguros S.A.


CONTACTS:
 Salvador Smith
Financial Analyst
+52 55 1102 2720, ext. 108
salvador.smith@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - MARCH 08, 2019
AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” to Reunion Re Compañia de Reaseguros S.A. (Reunion Re) (Argentina). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Reunion Re´s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Reunion Re’s balance sheet strength is underpinned by its risk-adjusted capitalization, as measured by Best´s Capital Adequacy Ratio (BCAR), which is at the strongest level. The ratings also reflect the company’s sound underwriting practices and investment strategy consistently supporting profitability despite a volatile economic environment, a well-structured reinsurance program, seasoned management team, and synergies provided by its main shareholder. Partially offsetting these positive rating factors are Reunion Re´s volatility in bottom line results derived from operating in an economy with high inflation.

Reunion Re initiated operations in Bueno Aires in 2012 and ranks among the top reinsurance companies in terms of premium market share. The company operates through a network of brokers and direct distribution channels in several cities throughout Argentina and Paraguay.

Reunion Re’s risk-adjusted capitalization has been maintained at the strongest level and is supportive of its ratings. Historically, the company has increased capital at a 40% compound annual growth rate supported by positive bottom-line results, driven by a consistent inflow of underwriting and investment income, which reflects the management team’s market knowledge and well-rounded experience in Argentina. A well-balanced reinsurance program placed among counterparties with a strong security level also reinforces the company’s risk-adjusted capitalization.

In AM Best´s view, the reinsurer has shown disciplined underwriting in a highly volatile market driven by inflation and foreign exchange rates. Despite the latter hurdles, in addition to negative effects derived from non-recurring adjustments in premiums reporting, Reunion Re has managed to maintain overall premiums sufficiency levels. By year-end 2018, the company´s sustained profitability reflected in a return on equity and return on assets of 25.2% and 4.2%, respectively, mainly driven by improvements in underwriting results including contained acquisition and management expenses.

Positive factors that might improve the rating level or outlooks include improvements in Argentina’s country risk profile in combination with a stable upward trend in Reunion Re’s profitability, while maintaining supportive risk-adjusted capitalization. Factors that could lead to negative rating actions include protracted adverse underwriting performance that leads to a significant deterioration in its risk-adjusted capitalization.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology .

Key insurance criteria reports utilized:


  • Available Capital and Holding Company Analysis (Version Oct. 13, 2017)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version May 14, 2018)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Understanding Best’s Credit Ratings.


  • Previous Rating Date: Not Rated

  • Date of Financial Data Used: Oct. 31, 2018

This press release relates to rating(s) that have been published on AM Best’s website. For additional rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.

AMB# Company Name
093637 Reunion Re Cia de Reas SA