AM Best Assigns Credit Ratings to Epsilon Reinsurance Company Ltd.
- July 21, 2026 02:38 PM (EDT)
//BestWire// - AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to Epsilon Reinsurance Company Ltd. (Epsilon Re) (St. Michael, Barbados). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Epsilon Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Epsilon Re was incorporated in December 2020, and started operations in April 2021. The company originated as part of a Mexican business group with extensive experience in the government sector. Epsilon Re is owned by Panama-domiciled Bardigiano Corp., a pure holding company.
Since its inception, Epsilon Re has progressively consolidated its presence in Mexico’s reinsurance market with a business portfolio operating in its life and non-life segments with markets shares of 52% and 48% based on gross written premiums, respectively. Group life accounts for 51.5% of the company’s gross written premiums, followed by energy with 17.3%, accidents and health (1.8%), and the rest (29.4%) in other property/casualty lines. Geographically, 94.6% of premiums are sourced from Mexico, and the rest from 3 other countries. Since 2024, the company initiated its internationalization process, incorporating operations in Colombia and Dubai.
Epsilon Re’s business profile assessment is neutral. The company operates as a niche reinsurer, with a portfolio concentrated mostly in Mexican governmental entities. The company’s focus on risk management and technical analysis, with a turnaround in profitability reversing historical losses, offsets the limitations arising from its geographic and client concentration.
AM Best assesses Epsilon Re’s balance sheet strength at the very strong level supported by the positive bottom-line results that it has managed to achieve during its short track-record, as well as capital contributions provided by its shareholders. Epsilon Re is expected to maintain prudent underwriting practices, preserving its capital position. Conversely, there is the inherent execution risk for a start-up business.
The assessment on operating performance is adequate, reflecting a gradually stabilizing operation. Continued discipline in reserving, expense containment and risk selection will be necessary to establish sustained trends.
The stable outlooks reflect AM Best’s expectation that Epsilon Re will maintain its overall balance sheet assessment, supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), while ongoing strategic initiatives will be executed with manageable deviations, and planned risk management as an essential part of that strategy.
Positive rating actions could take place if Epsilon Re is able to maintain its current level of risk-adjusted capitalization while improving its bottom-line results and profitability indicators to levels more in line with highly rated peers. Sustained deterioration in operating results or a significant weakening of Epsilon Re's risk-adjusted capitalization could trigger negative rating actions.
The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Aug. 29, 2024), 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:
· Evaluating Country Risk (Version June 6, 2024)
· Understanding Global BCAR (Version Sept. 18, 2025)
· Catastrophe Analysis in AM Best Ratings (Version Feb. 27, 2026)
· Available Capital and Insurance Holding Company Analysis (Version Sept. 18, 2025)
· Rating New Company Formations (Version Sept. 5, 2024)
· Scoring and Assessing Innovation (Version Feb. 20, 2025)
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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.
· Previous Rating Date: Not Rated
· Initial Rating Date: July 21, 2026
· Date Range of Financial Data Used: Dec. 31, 2021-Dec. 31, 2025
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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.
If the ratings referred in this press release do not indicate a specific country suffix, it is understood that they are granted globally and not on a national scale.
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.
The information sources used are based on information provided by the entity and/or its agents and/or advisors, considering public information and confidential information owned by the rated companies. Such information may include, but is not limited to, the following: audited annual and quarterly financial statements, business plans, financial projections and audit reports.
For more information on the scope of the information provided, please refer to the “Information Sources” section in policies and procedures.
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. AM Best keeps certain activities of its business units separate from each other to preserve the independence and objectivity of their respective activities. As a result, certain business units of AM Best may have information that is not available to other AM Best business units. AM Best has established policies and procedures to maintain the confidentiality of certain confidential (non-public) information received in connection with each analytical process.
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 use of Best’s Credit Ratings (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.